Abraham Lincoln once said, “you can fool all the people some of the time, and some of the people all the time, but you can’t fool all the people all the time.” In hearing about the start-up of Healy 2 and reading the Newsminer article about GVEA’s solar project, I feel strongly that our local cooperative takes us all to be fools. In doing some additional research, I came to understand the core issue of why we are on this path and it can be summed up in three words “investments have been made”.
While millions of jobs are created around the world in advancing the renewable energy (post carbon) economy, we are investing in not one but two coal plants. GVEA ratepayers are on the line for Healy 2, just like UAF students are flipping the bill for the one being built under the solar panels on the new engineering building sponsored by Usabelli. Those investments are focused on providing profit for the shareholders at the expense of the stakeholders. Generational debt on an already burdened populace through a system that externalizes the cost of business related to environmental degradation and the perpetuation of human suffering through institutionalized violence also known as poverty.
For decades, the people of the Interior have been promised that coal is “clean” and “cheap.” Along with this fantasy, we have been sold that natural gas will lower energy costs and clean up the air. We now have the worst air quality and the highest cost of energy in the country. Every day the cost of energy goes up, the quality of life goes down, and those who can, are leaving, some never to return. This is the legacy of coal in Fairbanks and with 20+ years education and professional experience in permaculture, the economics of the Natural world, I know we can do better; for our children we must.
The Newsminer article on the GVEA commercial solar farm printed some general numbers about the project; a 563KW array that costs $1,075M. As a “non-profit” cooperative they couldn’t directly take any of the commercial tax benefits, but they did get a grant for roughly 20% of the cost. Plugging 563 into the PV Watts website shows at this latitude the system would generate roughly 520,483 kWh/yr. To keep things simple for busy people, we can use the net present value of that power at $0.22/kWh to see the economic benefit of $114,506 each year. The math on this project shows the system to have a return on the investment in roughly 13 years.
By comparison, a community solar farm, would have painted a very different picture of solar in Fairbanks. For over a decade, groups throughout the US have been perfecting the idea (through several MW of installed capacity) as a financing mechanism that enables partnerships to develop between for profit companies and nonprofit organizations looking to invest in solar. Its complicated but possible to pass-through the credits for cash and other benefits. This type of partnership would have enabled this project to benefit not only from the standard investment tax credit (30% or $322,500), but as it is the largest in the state, it could have likely qualified for the new market tax credit (39% of $419,250). These benefits are culminative, so instead of reducing the cost by 20% they could have reduced the cost by 69%. The difference is, this financing structure would have provided a return on the same investment in less than 4 years.
According to the Solar Energy International Association, more than 1, 023 Megawatts of community solar have been installed in the US as of the first quarter of this year. Yet According to GVEA CEO, Cory Borgeson, 13 years was the best they, the local experts, were able to accomplish after 2 years of committee work. Originally, considering a 2 MW project, this solar farm was reduced to half a Megawatt as a “demonstration project”. With nearly 200 SNAP solar producers on line in the last decade, in my humble opinion, I see GVEA attempting to prove a reliable clean technology as too expensive while investing $300 Million + in a coal plant they hope won’t explode again. Compile this with the Pentex investment of over $400 Million into the hope of natural gas some day at a price that is still uncertain, and you really must wonder what’s going on inside GVEA and the FNSB, who created the IGU.
Remember, when they invest, we get the bill.