Legal Commentary

Solar Stimulus

By Jonathan H. Adler

When I was in Montana with my family in July, we happened upon Vice President Joe Biden?s security detail.  He was apparently in the area to, among other things, give a talk in Yellowstone National Park about the economic and environmental benefits of federal stimulus projects.  In today?s WSJ, Roger Meiners looks closely at one such stimulus project in Montana ? a $179,000 grant to a fish hatchery for the installation of solar panels ? and finds it wanting.

The fish hatchery uses about 34,000 kilowatt hours (kwh) of electricity annually. At 10 cents per kwh, that means a bill of $3,400. The solar panels, we are assured, will generate 75% of the hatchery?s electricity, at zero cents per kwh. Assuming so, the annual electric bill will fall by $2,550. Applying that sum to the cost, the recovery period for the solar panels (ignoring interest rates) is 70 years.

Solar panel experts say that panels have about a 25-year life, but the latest models, which no doubt are used in Ennis, may have a 40-year life. Taking that estimate, the panels leave us in the financial dark by 30 years. The rate of return looks like Las Vegas housing the past couple years.

Full post as published by The Volokh Conspiracy on August 21, 2010 (boomark / email).