Alexander Jablokov

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What is the real cost of clean energy?

From yesterday's New York Times, an article titled On Clean Energy, China Skirts Rules. Once again, when it comes to clean or green energy, someone is shocked, shocked! to find subsidies going on here.

As far as I can tell, there is no green energy without subsidy. At least right now.  If you dig, you'll find a grant, a tax break, some debt forgiveness: some sort of cash for the implementer that doesn't come from actual project savings. It's all lemonade stand economics. If Mom buys all the ingredients, it isn't that hard to show a profit on sales. And, right now, every form of green energy gets subsidies, whether solar panels, wind turbines, or even insulation.

Now, you'd think, that if it really saved so much money to insulate, or put solar panels on your roof, building owners could run the numbers and make the right decision. The problem is, when you do run the numbers, they don't look as great as you'd like. Returns are small, and take a long time to realize.

Now, just to be clear, I would love to find non-polluting, non-world-destroying sources of energy so that I could continue to live my comfortable lifestyle without occasionally fretting that I'm melting the ice caps or creating sterile deserts where there was once fertile land.

The problem is, I think too much about what's actually going on.  And all the hand-holding-leaf logos in the world aren't going to persuade me that things like electrochromic glass or sedum-covered roofs are actually going to do anything that matters.

If you need a subsidy to get the numbers to come out right, guess what: the numbers don't come out right. If your green project shows a benefit because of a subsidy, that just means that you're burning my money to keep warm, rather than your own.

So the short answer to the title of this post?  We don't know.  As with healthcare, too many people have an interest in making sure the answer is not clear.