A Colossal Waste of Money

Northwest Pennsylvania Collegiate Academy recently installed three solar panels on their roof, at a cost of $112,000.  The claim is that the solar panels will generate enough electricity to “power an average home.”  No doubt someone is feeling good about how this investment will be environmentally friendly, reduce greenhouse gases, etc.  However, from any rational point of view, this spending is a colossal waste of money.

Let’s assume that an “average home”  requires $2,000/year for electricity.  This seems a bit high, since we pay much less than that, and we have an electric dryer that is always on.  (When you have five kids, you create a lot of laundry.)  This means that at 0% interest, the payback period for this “investment” would be 56 years.

I work in the private sector. If I submitted a capital equipment request to my boss, and told him that it would pay for itself in 56 years, he would have my head examined.  Most equipment doesn’t even last 56 years, so it won’t even be around to pay for itself.  Heck, the entire school will probably not exist in 56 years, at least not with it’s current name.  From an economic viewpoint, it makes more sense to take the $112,000, invest it, and use the interest to pay the utilities.

But someone will say that the investment reduces greenhouse gas emissions and is therefore good for the environment, and is worthwhile even if the economic justification is not there.  This reasoning doesn’t work either.  It takes lots of energy to create, install, and maintain a solar panel.  Most solar energy systems use batteries to store energy (otherwise you don’t have electricity at night), and the batteries need to be replaced every decade or so.  Also, they are made of toxic chemicals.  Popular battery chemistries are Lead-Acid (that’s lead plus sulfuric acid), Nickel-Cadmium (two carcinogens), Nickel-Metal-Hydride, and Lithium-Ion.  The creation and replacement of these batteries creates its own environmental difficulties that may outweigh any benefits of reduced emissions.

Finally, solar power works best in the summer.  Guess when most of the kids won’t be around to use the energy that is generated?

The school will also use the panels for “research projects.”  That is also a waste.  If you want to use a solar panel for experiments, you can buy something like this or these and do just as many experiments for a lot less money.  Some of these solar panels can even be programmed to follow the sun, and they will generate enough electricity to keep the student’s cell phones charged.

If you are a City of Erie taxpayer, you can console yourself somewhat by knowing that the school district is not wasting Erie citizens’ money.   This is funded by a PA Department of Energy grant, so they are wasting the money of all Pennsylvanians.

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7 thoughts on “A Colossal Waste of Money

  1. Yeah, this is the kind of stuff that Rendell just couldn’t cut any more of, resulting in the shutdown over the summer. Boneheads.

  2. Look on the bright side: if, five years from now, it’s concluded that this technology isn’t economically viable, that may reduce the number of such projects. In which case, this WILL have been a useful research project, and maybe some lemonade will get squeezed out of that lemon.

    I know somebody who got a flywheel battery for his solar panel system (not frivolous for him, since he’s off the grid), rated at 1.5KWH. I don’t know about the expected lifetimes and chemical pollution of such a battery, though.

  3. Hi Darren,

    We don’t need to predict the future to know that this is an economically bad use of solar technology. We just need to use equations that you learn in basic microeconomics. I.e., any investment that costs $112,000 and yields $2,000/year is a bad idea, whether it is solar panels, or real estate.

    Heck, if they stuck that money in the bank, the price of solar panels might come down in 5 years, and it would be more feasible then.

    We will always have boondoggles like this because with a federal or state grant, there is an illusion that the money is “free.” That is, it just dropped out of the sky, and so you don’t have to be as careful when you spend it that you get a good value for your purchase. The Erie School District will not have to ask for a bond issue, or a tax increae, and therefore it is unlikely that they will face opposition for spending this money, even if it is not wise economically.

    I am sure that the dean at Collegiate Academy would not spend his own money, or even the money in his budget, for such a project. But since it is “free” government money, it is rational for him to spend it, because if he doesn’t, then someone else will.

  4. Solar Panels in Erie, PA. What a joke! Perhaps a better investment might have been Beanie hats with a propeller on top so the students could harvest all of that wind power generated by the clueless politicians who love spending other peoples money.

  5. I don’t think it’s the illusion that the money is free; the administrators I’ve dealt with understand that’s not true. Rather, I think it’s the recognition that somebody somewhere has determined to spend this money; if you don’t take it, somebody else is going to. You’ve got bills: a maintenance staff, repairs to the roof, it would be nice to upgrade the wiring in the building. Nobody will pay for that, but they’re willing to pay for solar panels, and you can roll those other jobs in with the solar panel installation.

    Heck, they may already know about the pointlessness of it, but if the politicians are paying for solar panels, you don’t tell the guy with the money that it’s a waste. You take the money.

  6. Aaaaaaand the Times-News is reporting today that they expect a 1% annual savings from these things.

    So, assuming a 20-year payback, that would mean that in order for this to be break-even, they would need to be paying $560,000 in annual electricity usage. And that assumes no breakdowns and no maintenance, I think.

    Somehow, I don’t think that’s happening.

    And, the newspaper helpfully pointed out that they would be getting the most benefit in summer.

    Now, I know they hold summer classes in June and July and some staff works year-round, but, I’m sure they’re not lighting the whole building and I know they’re not using the kitchens or most of the computer equipment in the summer.

  7. Oh, but I forgot! They’re going to sell ENERGY CREDITS and make money.

    You’d think that over the last year and a half, we’d have learned that selling things that have no intrinsic value but merely represent something that we’d like to have is economically dubious. But, guess not.

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