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THE NUMBER: Is solar a real solution for America’s energy woes?
US President Barack Obama speaks on his energy policies following a tour of the Copper Mountain Solar Project, the largest photovoltaic plant operating in the country, March 21, 2012 in Boulder City, Nevada. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
March 21st, 2012
07:55 PM ET

THE NUMBER: Is solar a real solution for America’s energy woes?

By Erin Burnett

President Barack Obama was in Nevada touting his energy plan and touring the country's largest solar energy generator.

The Copper Mountain Solar 1 facility has nearly a million solar panels that generate power for 17,000 homes.

It was financed in part with $40 million worth of federal tax credits.

The president says it's part of his plan to diversify the country's "energy portfolio" and promote alternative energy sources like solar.

CONSERVATIVE GROUP HITS OBAMA DURING AMERICAN ENERGY SWING

That brings us to tonight's number: 15.

According to an analyst at Pacific Crest Securities, that's how many years customers would have to commit to solar energy to break even.

Electricity prices are tied to coal and natural gas – not oil – and even though oil prices are high, natural gas is still low.

So you'd have to "sweat it out" for a couple of decades before you see returns.

But, even if you're willing to put in the time, solar energy won't work everywhere.

A state has to have the perfect combination of  "good sun" and high electric prices for solar to be feasible.

Right now, there are only three states: California, Florida and Hawaii with the right mix.

What do you think about the President’s energy plan? How "solar ready" is your hometown?

Would you be willing to commit to a 15-20 year “time horizon”?


Filed under: Economy • The Number
soundoff (14 Responses)
  1. Salam

    Erin, you mentioned in your segment that it'd take 15 years for residents to recoup their investment on solar energy.
    That figure is incorrect and does not seem to take into account Federal tax credit, state and & local utilities rebates. I'm in the process of installing PV (photovoltaic) modules for my home in Texas and will break even in less than 7 years. The recoup period would be even less if you factor in the increase in value of my home because of its solar-produced energy. Price erosion of solar panels will also help reduce the upfront cost. Please help educate the public about the benefits, financial and environmental, of renewable energy solutions. Your segment on this issue is based on factual data and goes opposite to what America needs to be doing in strengthening its clean energy commitment. Best Regards.

    March 23, 2012 at 2:52 pm | Reply
    • Salam

      meant to say ..." is not based on factual data ....". sorry for the typ.

      March 23, 2012 at 2:54 pm | Reply
  2. Kellie

    We appreciate your coverage of the solar industry but your facts are inconsistent to what we at Mercury Solar Systems (one of the largest solar installers on the East Coast) are seeing in this market.

    The payback across all the states we operate in (NY, NJ, CT, MA, MD, DE, PA) is less than half of what Pacific Crest states in their report.

    Also to say that California, Florida and Hawaii are the only states to have the right mix of good sun and high electricity rates is not accurate. New Jersey has the second largest number of solar installations in the country. Also interesting to note, Germany is one of the leading countries in the world for solar installations but receives less annual sunshine than the Northeast corridor of the U.S.

    We have hundreds of customers who can validate that their solar systems have in fact overproduced since being installed by our company.

    March 22, 2012 at 9:50 pm | Reply
  3. Cathy Fiore

    CNN Dr Kapoor are you serious very odd choice to speak of Witney Houston,s death .What has happened to your show?I for one will turn the channel from now on.

    March 22, 2012 at 8:07 pm | Reply
  4. John Munro

    I am surprised that given Erin Burnett's economic background she did not consider negative externalities in her reporting and analysis. After all, she claiims to always run the numbers herself.

    John Munro, PhD.

    March 22, 2012 at 3:50 pm | Reply
  5. John Munro

    Since fossil fuels such as coal and gas produce negative externalities at the local level (e.g., local air pollution) as well at the global level (e.g., GHG emissions), whereas solar energy technologies do not, it would be unfair to compare solar energy technologies with fossil fuel technologies without accounting for those externalities. You must further analyze the levelized costs of electricity generation technologies, developing a framework to capture some of those external costs. The framework accounts for the environmental damage costs of fossil fuels,

    March 22, 2012 at 3:48 pm | Reply
  6. Kevin

    Erin, while I am all for the development in solar energy, I find it fiscally insane for the Fed. Gov. to "invest" tax dollars into companies that soon go bankrupt. Let solar companies fail, but if the Wall Street bailouts taught us anything, it taught us that the government should not be in the speculation business, that is the free market's job.
    In addition, if the president was truly concerned about us working folks, he wouldn't be consuming our tax dollars, on expensive Jets, Limousines and SUV's. The U.S. is 16 trillion dollars in debt and the president is pushing a failed Green energy agenda, which has been fueled (pun intended) by his policies.

    March 22, 2012 at 11:26 am | Reply
  7. Delinda

    Erin mentioned California and Florida as being the most economical states for solar and said we could find more on this and other states on this site. can you provide a link showing which states benefit most from solar and wind? Thanks

    March 22, 2012 at 11:11 am | Reply
  8. Craig H

    Dear Erin –

    You dont think the US Military subsidizes oil prices? What would happen if we pulled out of the mideast entirely tomorrow ? Petroleum will skyrocket in price – that would effect everyone who drives cars to get to work and trucks that deliver the end product to the consumer. That cost would get passed on would it not ?

    Solar is exploding in popularity in part due to federal subsidies, in part due to high energy costs. California and Hawaii are great states to go solar in. Florida is not due to relatively low electric prices. NY, NJ, CT, MA, CO are great states to go solar in. Many of those states have plans where the consumers pay zero upfront and get a reduction in utility costs.

    For all the talk about Natural Gas – where is the natural gas going ? A very large percentage is being shipped out overseas instead of being put to better use in the US – -Look at LNG, TGP, GMLP prices. Those are LNG stocks shipping products to other countries. So who is enjoying the benefit here ? Is you utility bill lower ? Utilites are nervous about solar and renewables because the product is cheaper over time. That time frame depends on where you live but in most cases it can range from 3 to eight years if you purchase a system. The system will last nearly 30 years too.

    Nat Gas money is responsible for a lot of the black eye press coverage for renewable. Yes Solyndra did not do us any favors but smart people like yourself need to dig a bit deeper into this.

    March 22, 2012 at 7:20 am | Reply
  9. Narine Singh

    Solyndra puts the solar industries in a place where sun does not shine . As a result , it is too costly, no demand for it and the technology is in infantile stage. New York will have to give variances to home owners or change town codes and will property taxes be increase before I will considered solar energy.

    March 22, 2012 at 5:17 am | Reply
  10. Cancerinform

    Question to Erin: How come a country like "Germany is one of the world's top photovoltaics (PV) installers, with a solar PV capacity as of 2011 of almost 25 gigawatts (GW)" (cit. Wikipedia). It's not California, it's good old Germany, a country like many others with not always sun of course and cold winters. I can see from your comment that again it's only about the quick cash. But have you thought in your calculation that may be energy prices may go up dramatically within the next 15 years and yes prices for natural gas are still low but how long? And don't forget the shareholders of electric companies want their share as well. So let's get independent from the power companies.

    March 22, 2012 at 4:55 am | Reply
  11. Elliot Krasnopoler

    Dear Erin,

    My family purchased solar panels for our Maryland home 2 years ago. That was not one of the three states you listed, but already we are seeing a 50% decrease in our electricity bill, and based upon our previous bill we will break even in 12 years. Notably, our state is not a particularly sunny state like California and we will still break even in fewer than you analysts 15 year estimate. Perhaps they are looking at an average – however your news story seems to claim that the average is true everywhere and I am writing to state that that is wrong.

    March 22, 2012 at 12:02 am | Reply
  12. thelaurelbush

    It seems to me that coal is artificially low though since companies like Massey have paid minimal fines for pollution to our water and soil. Now cross ridge mining is coming to Tennessee. It is currently being debated in the new Scenic Vistas Act. They already have toppled the economies of West Virginia and Kentucky. I hope solar and other alternative energies take us away from being pushed to the brink.

    March 21, 2012 at 11:51 pm | Reply
  13. David

    You need to check your fact Erin. The payback period for Solar Power in the North East is about 5 years. NJ, NY, CT and MA are excellent states for solar with their high electricity prices and cool temperatures. NJ has more solar power than CA per capita.

    March 21, 2012 at 8:22 pm | Reply

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