What’s more, we have done nothing to prevent the same thing from happening again.
Publicly funded state agencies needing to keep the lights and heat on during the freeze racked up huge bills. In February 2020, the Texas Department of Criminal Justice, which operates the state’s prisons, paid about $1.2 million for natural gas. This February the cost soared to nearly $8.5 million.
The University of Texas-Austin paid $940,000 for gas in February 2020. In 2021: $3.65 million.
Last month, state legislators passed laws to help companies borrow billions of dollars to pay for storm-inflated power costs and bill ratepayers over time to pay it back. Yet well before that, many Texas cities that own public utility companies already had been forced to scrounge up additional millions to cover gas and electric bills hugely inflated by the storm-caused shortages.
Outside of Dallas, Denton borrowed $140 million. Georgetown, just north of Austin, borrowed $48 million to cover the cost of providing electricity to its residents during the storm. Ratepayers will have to cover that, as well as a projected $5 million in interest and costs over the term of the loan.
Other cities dipped into their savings accounts to pay the storm-inflated power costs, depleting reserve funds. Garland siphoned millions from its rainy-day account. Weatherford, a small city outside of Fort Worth, drew down $13.7 million.
Wherever the money came from, eventually it will be repaid by local citizens, said Steve Moffitt, vice president of Schneider Engineering, a Boerne-based company working with municipal utility companies across the state to find the extra money. “At the end of the day, it has to come from customers somewhere,” he said.
The small city of Hearne borrowed $1.9 million to cover costs incurred by its publicly owned electric utility company. Ratepayers will pay off the debt over the next 10 years, said City Manager John Naron.
“Usually if we get a $2 million loan, we’re fixing streets, the sewage system, street lights,” he said. “Now we’re borrowing $2 million and getting nothing for it.”
When the dust cleared on the biennial legislative session that ended June 1, one thing was clear. Although it was ordinary Texans who suffered when the freeze hit four months ago — millions were left shivering in the dark for days; hundreds died — it is also ordinary Texans who would foot much of the bill, said Tim Morstad, associate director of AARP Texas.
“Consumers are being forced to prop up the system that failed us,” he said.
[…]
The magnitude of the financial fallout is difficult to digest. Experts estimate that based on the sky-high prices, nearly $50 billion-worth of electricity was consumed in Texas during the one-week storm — 250 times the normal cost, said Beth Garza, an energy analyst for R Street who from 2014 to 2019 was ERCOT’s independent market monitor, which watchdogs the electricity market.
Companies that had gas and electricity to sell cashed in on a Uri windfall. Some Wall Street investors made millions, too.
For those forced to buy gas and electricity during the height of the freeze it was expensive at best, catastrophic at worst. Brazos Electric Power Cooperative, the state’s largest and oldest member-owned electric company, declared bankruptcy after racking up about $2 billion in charges when its generators failed.
To spare ratepayers the financial pain of getting hit with giant utility bills all at once, last month state lawmakers passed several laws to help the biggest losers borrow money and pay it back over time. The laws are complex, and analysts and companies said they are still deciphering how they will be used.
Pending high-stakes legal battles over the storm’s giant bills add more uncertainty to the final tab. “There are a zillion contractual disputes underway right now,” said Garza, pointing out that those, too, will end up costing companies – and their customers — giant legal fees.
Still, analysts projected the taxpayer tab would come to roughly between $7 and $9 billion. Yet that doesn’t include numerous other hidden costs.
The primary advantage to our market for power and electricity has always been low prices. Lots of firms offer a variety of plans, both fixed and flexible rates, and for the most part it has worked pretty well, as long as you do a bunch of research and remember to switch plans again before your low-rate plan ends and you get dumped into a default higher-rate plan. (Some people do lots of research.) All of this is predicated on the Texas energy market being geared towards low prices, and the way it does that is by not mandating capacity. There’s no backup power, no plants generating extra power that isn’t used, and that means we’re not paying for anything we’re not using. It’s efficient, and that efficiency keeps prices down.
The down side is what we saw in February. Because there was no extra capacity, when a number of plants went down, there wasn’t any power to spare. The only way to get more juice was to pay for it, and when prices are allowed to be unconstrained, you can be sure someone is going to make a buck off of it. We also learned that another key ingredient to our everyday low prices for electricity was that the power plants could be and were run as super low-cost operations, which in this context meant no money spent on weatherization. I think we all know how that turned out.
The argument in favor of our system is that we have paid a lot less for our electricity over a long period of time, so that even with the price shocks of February and the borrowing that various municipalities and utilities and co-ops have had to do, we’re still coming out ahead. But that isn’t of much help right now, and as we did nothing to change the fundamentals of our power market, we could face the same situation again at any time. People will be paying more now for what happened his past winter, and they have no insurance against a repeat. Even more, I don’t think a lot of people understand that. I don’t think we’re any more prepared mentally and emotionally for the next time this happens than we were this February. Maybe if we go another ten years before it happens again it won’t much matter. Do you want to make that bet? Like it or not, you already have.
Not due to the freeze but the city is going to raise your water bill over the next few years, it is going to nearly double.
Glad you finally came out as a Russian bot, Jason.
If you lived here in Houston, it would be “Our” water bill.
Yes, I guess here in Russia I didn’t know that all of Houston paid a collective “our” water bill. I didn’t know that Democrats had already instituted communism and we all paid a collective “Our” water bill.
“Yes, I guess here in Russia I didn’t know that all of Houston paid a collective “our” water bill. I didn’t know that Democrats had already instituted communism and we all paid a collective “Our” water bill.”
It’s true: community and communism share a word root.
Of course, so does communion.
It’s really not the case that electric power rates in Texas are especially low. The state ranks around the middle of the pack in average electric power rates (see https://paylesspower.com/blog/electric-rates-by-state/); power is cheaper in Oklahoma, Arkansas, Louisiana, North Carolina, and lots of other states. And that’s not counting the big one-time hit on costs a lot of people in Texas got during the freeze — when many didn’t even get any power. The Texas grid is designed to run on the ragged edge of failure, and it really doesn’t even deliver the promised cheap power when it’s NOT failing. Deregulation has been a huge failure for the public and has paid off only for some rich investors. Of course Texas Republicans’ response is to yell BUILD THE WALL! BAN CRITICAL RACE THEORY! LOOK AT THAT SHINY OBJECT OVER THERE! And it seems to work for them, which is discouraging.
They say everything is bigger in Texas …
THAT INCLUDES MASSIVE WEALTH TRANSFERS TO INDUSTRIES THAT RUN THE STATE FOR THEIR OWN BENEFIT
Re: “It’s efficient, and that efficiency keeps prices down.”
Hogwash!
There is nothing efficient when the state government (PUC) *fixes* the wholsesale price at $9,000 per MWh because the already super-elevated price generated by the normal operation of supply & demand in the ERCOT market ($1,200) aren’t considered good enough for the industry to take advantage of the winter storm crisis.
The generating side of the industry didn’t even have to conspire to fix prices, not to mention at an astronomical level. Their people on the PUC (picked by Oil & Gas Governor Abbott) did it for them because they partook of the industry’s collective “understanding” that it was a good time to reap the blessings of cartel capitalism and profit from a disaster at the expense of captive consumers.
As we are all well aware, living and breathing Texas customers were simply cut off to freeze without notice so as to avoid total gird failure. This allow the grid to operate as a conduit for a massive transfer for wealth from the consumer side to the producer & speculator side of the electricity “market” while woefully failing to meet the needs of all Texans, millions of whom were left out in the cold in their own homes.
A good junk to of wealth seized on the retail/consumer side wasn’t even in existance to settle the enormously inflated ERCOT invoices, which is why those amounts are now to be borrowed on Wall Street, to be paid off in installments over many years, if not decades…
…. so that the informal private cartel that controls the energy policy of the State of Texas can get paid in full to reward them for their failure to keep the lights on and warm bodies warm. Private cartel for private profit, as distingushed from – say – OPEC, whose members are sovereign states with national interests.
BUILD A POWER PLANT NOW, AND WE’LL MAKE SURE YOU GET PAID BILLIONS
The PUC’s purported rationale for ordering the wholesale price to the max was to “incentivize” additional generation, when there was nothing more to incentivize because of (1) physical impossibility (storm-related generator outages) and (2) because the scarcity-driven market price was already about 50x the normal price (with even higher spikes for short intervals), and had thus already incentivized everything there was to incentivize. Who would hold back under such market conditions?
As a reflection of the true economic forces and motives at work — namely, the procurement of an enormous financial windfall for the energy industry — the initial PUC price fixing order instructed ERCOT to price-fix backward, i.e. to bill energy that had already been consumed following the wee-hour declaration of Energy Emergency Alert Level 3 (EEA3) by ERCOT at $9,000 rather than leaving in place the already highly elevated spot price generated by the software used to administer the market based on precarious supply & demand conditions.
You obviously can’t incentivize behavior that coulda or shouda have occurred yesterday. But you can increase the size of the haul by fixing the unit price on next invoice.
RETROACTIVE PRICE GOUGING
Think about it for a moment: The matter of after-the-fact premium pricing with retroactive effect: Say you fill your tank today for $50 and leave Galveston and head North to avoid a prognosticated hurricane and associated strom surge. You then get a credit card bill later with a charge for $2,000 or perhaps $10,000 for that same tank of gas that rang up as $50 at the pump. Oh well. We decided the price should be higher to reflect the arrival of the hurricane after you left. You can pay it off in monthly instalments. See APR disclosures and our method of computing minimal monthly payment.
PUC VERBATIM ON FEB 15:
“The Commission further directs ERCOT to correct any past prices such that firm load that is being shed in EEA3 is accounted for in ERCOT’s scarcity pricing signals.”
The following day, the PUC amended its order to undo the retro-active pricing directive and “disappeared” the original one from its homepage.
EFFECT ON GAS MARKET
With the state government price-guarantee for electricity *fixed* at $9,000 p/MWh for the duration of the weather event emergency, as compared to the normal price of about $25 for the same amount of energy, it was gold-rush time for the natural gas companies and gas traders whose commodity fuels the bulk of the generatoring fleet in Texas.
Talk about price signals. Government price-guarantee signals for an essential commodity!
The spot price for natural gas jerked up from ca. $3.00 to hundreds of dollars for the same unit of quantity.
See details here: https://www.eia.gov/todayinenergy/detail.php?id=47016
In its petition against MACQUARIE ENERGY LLC, San Antonio’s integrated utility, CPS Energy, says it was charged a unit price of $151.75 for deliveries February 13-16 on the same invoice on which it was billed as low as $2.48 for the same amount just days earlier, making for a swing of 6,018% in pricing. CPS Energy says they tendered payment in the amount of $38.83/MMBtu as the outer limit of a legitimate variable price, and went to court to dispute the remainder. (The contract doesn’t fix the price ex ante).
At the Houston Ship Channel trading hub, the gas price on Feb 16, 2021 was $400. See eia report referenced above.
The media and the commentators focus mostly on the buden of the “debt” and who is going to “have to” pay it, and how. Equal attention should be given to how this “debt” came about in the first place, and whether it is legimate.
And where all those billions have gone and are going.
As usual, Wolf is spot on regarding the state sponsored price gouging that occurred, that ultimately stops at Gregg Abbott’s desk, because he appointed the people who created the situation.
If only there was a way for homes, or communities at large, to generate and store their own power…. with, maybe, I don’t know, silicon wafers or photovoltaic cells placed between sheets of glass with, maybe, some sort of device, oh I don’t know, like a battery that could hold the charged electrons somehow…
Or maybe, if we had some vacant, unused, un-farmed land somewhere here in Texas, maybe out west of San Antonio or up 290 or I-45, where some of them newfangled solar panels could be placed, beaming their energy towards a molten potassium and salt tower that could somehow, golly gosh, use that crazy hot goo to boil water and generate electricity…
…you know, instead of burning dead dinosaurs, cracking atoms, or relying on ERCOT to keep the natural gas plants running.
https://insideclimatenews.org/news/16012018/csp-concentrated-solar-molten-salt-storage-24-hour-renewable-energy-crescent-dunes-nevada/
What’s your point? Either the water bills go up, or the City gets sued by the Feds and we pay for the lawsuit and the water bills still go up.
In your story you state that “The primary advantage to our market for power and electricity has always been low prices.”
This is not true since deregulation, according to this analysis of prices by Fox Business:
https://www.foxbusiness.com/lifestyle/texas-electric-bills-were-28-billion-higher-under-deregulation
From the story: “From 2004 through 2019, the annual rate for electricity from Texas’s traditional utilities was 8% lower, on average, than the nationwide average rate, while the rates of retail providers averaged 13% higher than the nationwide rate, according to the Journal’s analysis.”
TAKE IT FROM THE STREET
If you want a more mainstream source than FOX, consider this from an exclusive WSJ market report with consonant findings, based on different data and analytical methodology:
“Texas’s deregulated electricity market, which was supposed to provide reliable power at a lower price, left millions in the dark last week. For two decades, its customers have paid more for electricity than state residents who are served by traditional utilities, a Wall Street Journal analysis has found.”
Tom McGinty and Scott Patterson, Texas Electric Bills Were $28 Billion Higher Under Deregulation Competition in the electricity-supply business promised reliable power at a more affordable cost, THE WALL STREET JOURNAL (Feb. 24, 2021)
“Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to the Journal’s analysis of data from the federal Energy Information Administration.”
“The crisis last week was driven by the power producers.”
https://www.wsj.com/articles/texas-electric-bills-were-28-billion-higher-under-deregulation-11614162780
Keep in mind that the deregulated prices are an aggregate of all the different providers and plans. Yes, if you don’t shop around, you’ll likely pay more than you should. If you take 5 minutes every year or two to use the handy powertochoose.org state sponsored website to compare providers, plans and prices, you’ll pay on the low end of the spectrum.
People who end up with providers of last resort, or who don’t compare plans and churn providers every so often pay more. That’s the free market. What you folks are promoting is, “we shouldn’t have to shop for our new car at different dealerships, we just want one dealership that sets the price for that shitty Trabant that will break down 3 blocks from the car lot, and that’s it.” I swear, Texas can’t institute mandatory anti-communist training for our kids fast enough.
We also have to consider that municipal power systems have a big advantage over the private sector….they avoid all those pesky taxes. Big ass power plant? Property taxes paid: $ 0.00. Miles of transmission and distribution lines, as well as substations? Taxes paid: $ 0.00
How much does Centerpoint pump into our economy? Quite a bit, I imagine. They pay property tax on all their facilities, their trucks, their equipment, all of it. Compare and contrast to the Austin electric company. No taxes generated there, of course Austin can charge lower prices because they don’t have to pay property tax, and all the other taxes levied by various governmental entities.
One of the things that really really sucks about this whole setup is that it was sold to the rubes of GOP maga-fantasyland as a free market solution, when what it was really about was giving the wealthy a way to milk the cash cow. All that was needed was Abbott-appointed puppets to set the ‘free market’ price… then keep it at astronomic levels long after the crisis was over.
C.L.,
You like solar panels? Sweet! Who wouldn’t? Joe Biden wouldn’t. At least, Joe Biden doesn’t want you mining the raw materials needed for those solar panels and batteries here in the United States. I guess he’s OK with importing solar panels, though. That will work out until there’s a conflict, and China decides to cut off our power by stopping sales of solar panels and batteries to us. Weird, now that Biden has green lit the Nordstream II pipeline, Russia can cut off the heat in Germany any time it wants to, when there’s conflict. But Russia colluded with Trump because….nonsensical reasons. Weird how Trump supported domestic mining and put tariffs on foreign made solar panels to encourage US made solar panels. Weird contrast, huh?
https://www.msn.com/en-us/money/markets/biden-s-plan-to-stop-mining-critical-minerals-irresponsible/ar-AAKtG84
And then there’s that pesky problem of, solar panels don’t work when covered with snow or sheets of ice. Kinda like when we needed power in February!
Nothing like giving the rich a direct line into each of our bank accounts through our power bills. A Wall Street dream come true.
Ya know what doesn’t work in the winter, either ? Gas-fired power plants in Texas !
SHOCKER: SOLAR WAS THE BRIGHT SPOT IN THE FEBRUARY CRISIS
Bill says: “And then there’s that pesky problem of, solar panels don’t work when covered with snow or sheets of ice. Kinda like when we needed power in February!”
Alright, alright, alright. Turns out that the solar component outperformed expectations during the severe winter event in February. The only component in the energy source mix that did so.
Numbers as follows:
Difference from expected (GW)
Natural gas: (18.10)
Coal: (5.80)
Wind: (3.30)
Nuclear: (1.10)
Solar: 0.47
SOURCE: Table 1. Comparison of Fuel Sources: Expected Capacity and Actual Generation, February 15–19th. Joshua W. Busby et al, ‘Cascading risks: Understanding the 2021 winter blackout in Texas. ENERGY RESEARCH & SOCIAL SCIENCE Volume 77 (July 2021).
JOURNALISTIC COVERAGE
Audrey Carleton, “Solar Was Only Energy Source to Outperform Expectations During Texas Blackout: Natural gas was responsible for two-thirds of February’s energy deficit, a new study found.”
https://www.vice.com/en/article/z3xyex/solar-was-only-energy-source-to-outperform-expectations-during-texas-blackout
So, by reporting the combined performance of renewables (wind + solar) as a sum, the fact of the superior performance of solar can conveniently be suppressed. Not to mention that ERCOT initially reported the performance of solar relative to technical capacity (which makes no sense since solar is not expected to yield much if any power at night when the sun ain’t shining).
Should you have contrary information regarding the performance of solar during the winter storm event, please share below.
Wolf,
Your numbers are “difference from expected” output. Hey, when you have lowered expectations to begin with, it’s easier to exceed those marginal expectations.
Example:
In another thread, we’re all lamenting the fact that it turns out on line learning for Texas’ school kids was a big fat failure (hello, conservatives told you that would happen, and we advocated for kids in the classrooms). Turns out that all demographics (all races) scored worse after being prevented from attending classes in person.
But some races did much worse than others, and that was predictable. So let’s say we already figured the black kids would score worse than the Whites and the Asians. If we grossly lower our expectations of the black kids, and then they perform slightly better than the already lowered expectations, then we can cheer that the black kids did better than expected! Yay!
That’s a clever way to put a positive spin on negative numbers, which is what your “better than expected” power performance numbers actually represent, Wolf. We don’t EXPECT natural gas plants to under perform, we expect them to provide steady output. We DO expect solar (and wind) to be intermittent, with wild swings in output. We expect solar to perform poorly in a snow and ice storm.
https://skeptics.stackexchange.com/questions/50358/did-wind-and-solar-exceed-expected-power-delivery-during-winter-storm-uri
Lobo, you can argue logically against liars like Bill or Jason until you are blue in the face.
Follow the saying, don’t argue with liars, and stupid.
Bill is a racist, a liar, and typical Republican low life, that claims that he is Libertarian, which is a lie.
Unchain the dogs, chain the racists a la Bill Daniels.
Bill, why not present some reasons why you are not a racist.
Affirmative Action Manny,
https://docs.house.gov/meetings/IF/IF03/20210324/111366/HHRG-117-IF03-20210324-SD023.pdf
From page 23 of the government’s own report:
“For the same time frame, the VCE derived ERCOT solar generation is also plotted. It is apparent when the system with cloud cover and snow went through ERCOT. Quickly though, after the storm passed, the solar generation starts to bounce back on February 15th. By the 19th, the solar had mostly recovered.”
Winter storm Uri was from Feb. 13-17th. So gee, by the 19th, after the crisis had passed, solar had mostly recovered….but it wasn’t there kicking ass when we really needed it, when Texans were freezing to death…..my point, evident to all but the most obtuse (that’s you, Manny).
So the solar didn’t ‘fully recover’ until the 19th… a day after power was restored to my house…so solar power, going forward, should be poo-poo’d ? That’s not much of an argument to NOT look for alternative energy sources in the future.
Clear as a bell, I can remember standing in my backyard in freezing temperatures, snow on the ground, icicles hanging off my roof, with the sun shining like a guiding light.
C.L.,
Nothing wrong with solar, as long as we understand it’s limitations. Remember, I’m a proponent of Trump’s “Yes, all of the above” approach to energy production. Even if we have battery backup (that we have to import because Environmental Joe won’t let us mine the materials needed here at home), we still need coverage for all of that solar from something that can be MADE reliable. We can fix the issues that caused the natural gas wells, pipelines, and power plants to go down during the storm. We can fix the issues that caused the nuke plant to go down. We can fix the issues that caused coal plants to go down. We can’t fix “gee, it’s cloudy and snowing for days on end.”
I look into solar every blue Moon for my house and, it never makes economic sense for me. I have natural gas, and my yearly electric expense is less than $ 1,000/year, all in. The only way it would make sense, maybe, is if I could sell excess power to the grid, but most plans don’t really allow that.
https://www.texaspowerguide.com/solar-buyback-plans-texas/
There are some that are pretty decent about net metering, in other words, I could sign up for a plan that would ameliorate the costs of the kW’s used, but none of them generate actual money in the consumer’s pocket. So I’m out $15-20,000 up front for a solar system with no battery backup (useless when the power goes out), plus the opportunity cost of that money, plus the increased cost of insurance going forward in perpetuity, plus the cost of maintaining and repairing that system, all to save less than $ 1,000 per year, and I’ll still be paying the monthly costs to connect to the grid.
Bill: The expected performance numbers for the different categories of generation were from ERCOT, which is required to do the projecting and planning for forthcoming energy needs. The weather forecasts are one key ingredient, but the numbers are not picked out of thin air. (Additionally, the analogy of the technical capacity and performance of power generation units with the mental capacities and performance of pupils is far-fetched.)
If you want to insinuate that the technical people at ERCOT were biased against solar and were therefore somehow low-balling the expected performance of solar, that’s a different genre of argument, and not a very compelling one for the following reason:
Any bias in favor of fossil (based on the huge role of oil & gas in the Texas economy) and against renewables should have gone the other way, i.e., should have resulted in high-balling the expected performance of solar so as to make solar look bad when it can’t deliver. But the data here shows the opposite.
In any event, solar — unlike wind — currently acounts for a rather small percentage in the energy source mix in Texas, so whether solar did well or otherwise could not have had much of an impact on the aggregate supply situation, given the magnitude of the generation shortfall. And the hydro-electric component is apparently so small that it didn’t even make it into the data table (or ERCOT’s graph).
BOTTOM LINE: Solar’s over-performance during the extreme winter event in February 2021 *mitigated* the supply shortfall, but only marginally.
But also keep in mind that a single data point doesn’t lend itself to any conclusions as to what role solar could play in Texas (or elsewhere) in future, especially in combination with energy storage. What is clear is that we have much sun in Texas and empty space to put up panels, so the geolocational conditions are favorable.
And as for wind, the conditions are also favorable, but it would be too simplistic to just think of wind in West Texas when this fuel-free energy resource is also available off-shore, where temperatures are more moderate and intermittency patterns differ. And as for icing issues in West Texas, it is no secret that wind turbines work in much colder climates.
Wolf,
“If you want to insinuate that the technical people at ERCOT were biased against solar and were therefore somehow low-balling the expected performance of solar, that’s a different genre of argument, and not a very compelling one for the following reason:
Any bias in favor of fossil (based on the huge role of oil & gas in the Texas economy) and against renewables should have gone the other way, i.e., should have resulted in high-balling the expected performance of solar so as to make solar look bad when it can’t deliver. But the data here shows the opposite.”
I disagree with your thought process. I’m saying ERCOT planners correctly planned for a week of cloudy skies and snow that would decimate solar production in Texas, which mirrors their lowered expected output. The fact that solar slightly outpaced their dismal estimate merely indicates they were slightly too pessimistic about solar….slightly.
Compare and contrast to their projections for gas fired energy. That drastically UNDER performed their projections, because really, who thinks natural gas will be unreliable? We EXPECT it to work. They were way too optimistic about gas fired, nuke, and coal plants.
Again, I’m not adverse to solar. I support the solar farm in Sunnyside, for example. I’d buy a system for my house if it had any positive ROI. I support others who might want to buy solar, if they think they can make any money on it.
It’s just not ready for prime time, as a dependable source of electricity….yet.
“It’s just not ready for prime time, as a dependable source of electricity….yet.”
I suspect all or a portion of the 230,000 homeowners in CA or the 6% of owners (nationwide) who already have panels installed, would beg to differ,.
There’s an inherent ROI, a substantiated, justifiable, and defensible real estate market reflection, on homes with solar panels installed – it’s not just about the reduction in your monthly electricity bill.
https://www.appraisalinstitute.org/assets/1/7/ResidentialGreenandEnergyEfficientAddendum.pdf
Re: “We can fix the issues that caused the natural gas wells, pipelines, and power plants to go down during the storm. We can fix the issues that caused the nuke plant to go down. We can fix the issues that caused coal plants to go down.”
TRUE, we COULD, but Abbott et al don’t exactly appear to be working towards that end.
“There’s an inherent ROI, a substantiated, justifiable, and defensible real estate market reflection, on homes with solar panels installed – it’s not just about the reduction in your monthly electricity bill.”
Well, let’s look at that. Let’s say you got into a lease deal to have solar panels put on your roof. You entered into a contract to lease your roof, and any new buyer of your home would have to take over that contract in addition to buying your house. That makes your house deal more complicated, and less attractive to a buyer.
But wait! You bought your solar system with cash, outright. Great. Now when I’m comparing your house to another just like it, yours costs more and is less affordable to buyers. California complains about homes being too expensive, then mandates a bunch of stuff that causes new homes to BE more expensive, and no one can figure out the causation. Californians then move to Texas, driving up OUR real estate prices.
But OK, let’s say you buy that solar system, then sell the house 10 years later. Yes, you’ll get some residual value of the solar system in the sales price, just as if you sell a car you bought 10 years ago. It’s still worth something, but not nearly what you paid for it brand new.
So the question becomes, did you actually get any ROI from your solar system after considering the extra insurance you’ll need to have, the increased deductible you’ll have to pay if/when you have a claim, the opportunity cost lost with your solar purchase vs. investing more traditionally, as well as the big up front cost, and the cost of maintenance? I don’t know, maybe you did.
Running the numbers, it would never work for me, unless electricity becomes dramatically more expensive (Obama’s dream of necessarily skyrocketing the cost of energy), or solar gets a LOT cheaper.
Any Kuff readers actually HAVE a home solar system? I think we’d all be interested in a real world Houston cost-benefit analysis.