Solar in a world awash in oil

Back from the East Coast on New Years Day, home to zero degree temperatures, two feet of snow, an old, drafty house, and some very cross cats. I figured to hunker down under a comforter, watch some basketball, and put the various space heaters to work, cocooned by the knowledge that the heat was coming from our 13 solar panels, rather than some carbon-exhaling power plant.

Later in the day I deigned to rise from the couch and visit my office in the backyard shed, on whose pitched-roof those panels are mounted. It hadn’t occurred to me that the panels would be buried under two feet of snow, like everything else. The cats refused to shovel, so I had to do it. As long as I’m at it, maybe I should dig a deeper crawl space under the house, install a furnace, and burn some of that cheap oil and gas that’s out there.

It may be politically correct to have solar panels and wind turbines in the backyard, but is it stupid, too? Fossil fuel prices are plummeting. Perhaps my carbon footprint got a little smaller with the panels, but Las Vegas can erase that in a nano-second if limousines roar around on cheap gas and the casinos turn up their air conditioning.

Are my panels making a difference in something other than my heart rate?

The truth is, most people don’t install solar to be virtuous. They do it to save money, and to spare themselves from the gougings of the grid, the power industry, and the cartels that pull the world’s energy levers. If the glut of cheap fossil fuel drives down energy prices and keeps them down — as the U.S. Energy Information Agency now forecasts — who would be stupid enough to invest in solar panels?

Well, lots of people, apparently. Not just starry-eyed off-the-grid doom-sayers, but the guys who really see the future: Wall Street investors. Robert Rapier, chief analyst for The Energy Strategist, notes that solar stocks have been on a big upswing over the past year, oil glut or not. And it’s not just my office but entire cities that are getting solar juice: Utility- size solar stocks are “a strong buy.”

The U.S. Federal Energy Regulatory Commission calculates that one-third of new utility electricity in the first half of 2014 came from solar – and solar capacity in the U.S. increased 418 percent from 2010 to 2014. This predates the surprise climate change agreement reached recently between China and the U.S., which tugs the developing world sharply toward renewables and nuclear.

It’s a trend that – like a big ocean liner turning around in a harbor – doesn’t just kick into reverse when a seal flippers by, or with a glut of fracked oil and gas. The material and manufacturing costs of solar technology have dropped, predictably, as the market has enlarged. The incentive for research and development rises as the investment horizon lengthens, leading to more breakthroughs. Tax incentives matter, and they may get bigger. Even die-hard climate-change-deniers listen when conservative columnists like Charles Krauthammer push for big tax hikes on oil consumption, with a grudging acknowledgement that “prudential reductions” in carbon emissions might not be such a bad thing.

For a local, or regional, perspective, I checked in with Scott Kane, who runs Creative Energies out of Lander (full disclosure: Kane’s outfit installed the solar panels on my shed; sadly, he did not offer me a kickback to be quoted in this column). Creative Energies does about half its work on residential solar installations in the Colorado-Utah-Wyoming region; the other half is larger-scale commercial and government work, including a recent installation in Antarctica. When we put the panels on my shed, we calculated that my utility bill savings – not to mention the payback I get when my excess energy feeds back into the grid – would recoup the investment in less than a decade.

Kane’s company installed about 500 kilowatt-hours of solar in 2013, the year my 13 panels went up (I contributed a robust 3 KW-hours of that total). In 2014, Creative Energies installed 2,000 KW-hours. The big operators in populous states like California with pro-renewables policies are going gangbusters, but so are our smaller local wind and solar businesses.

“We keep an eye on coal and natural gas, we think about it a lot,” said Kane. “But what we really compete against is the cost of a KW-hour, and that really hasn’t changed much.” Because unlike the gas pump prices, utility prices for power change slowly, like that ocean liner in the harbor.

So I’ll leave the panels up, and when the next snowstorm hits, I’ll be out shoveling. My heavy breathing may be emit a big dose of CO2 into the atmosphere. But this isn’t about climate change. It’s about saving money.