Yet Another State-sponsored Enviro-scam

So, I was looking up solar power generation, wondering about costs.  I won’t even bother talking about how expensive it is to install, never mind how much it costs to maintain.  In the process of this, I stumbled over a program being proposed by Consumers Energy (Michigan’s electrical provider) whereby if you generate electricity from solar power, you can sell this to the energy company, and the amount is deducted from your bill.

It is being proposed under the auspices of “green initiatives.”

The problem is, the whole thing is a MASSIVE scam perpetrated on the citizens of the State of Michigan.

For those of you not in the know, Michigan – in legislation spearheaded by Michigan’s own socialist Evita Peron: Jennifer Granholm – the power companies (Consumers Power being one of them) must have a certain percentage of their energy portfolio created from “green” or “renewable” energy sources.  This means windmills, solar, biomass, and the like.

Now, the state is pushing people to put up solar panels, and saying that they can “sell” the energy they create back to the energy company for a credit on their bill.  Sounds like a good idea, right?

Like I said, I won’t go into the costs involved with having the capacity to generate something as low as 1 kWh (kilowatt-hour).  Looking some of this up, I discovered the following:

Thus, a typical $12,000 system (after state rebates and federal tax credit) might have a mortgage payment of $1,000 per year and generate about 3,400 kilowatt-hours of electricity per year.

So, you end up paying about $12,000.00 for solar panels.  Doing a little research, this is actually on the low end of the price spectrum.  Nevertheless, you’re paying several thousands of dollars out of pocket to put up some sort of solar collection system.  For argument’s sake, I’m going to say it’s only $10,000.00.

OK, now I looked into the RRP (Renewable Resources Program) contract and found out the rates of payback that the power company provides:

Monthly Rate

System Access Charge: $25.00 per month, per generator meter, to be paid to the Company by the customer or to be deducted from the payment to the customer by the Company Sales of Energy to the Company that begin service no later than December 31, 2009:

  • $0.650 per kWh purchased by the Company, payable to a Residential customer
  • $0.450 per kWh purchased by the Company, payable to a Non-Residential customer

Sales of Energy to the Company that begin service after December 31, 2009:

  • $0.525 per kWh purchased by the Company, payable to a Residential customer
  • $0.375 per kWh purchased by the Company, payable to a Non-Residential customer

And the contract period:

Sales of energy to the Company under this schedule shall require a written contract with a minimum term of one year and a maximum term of 12 years.

Limitations?

The purpose of this rule is to develop and test programs to enable the development of Michigan’s renewable energy resources. Generation associated with a residence must have a minimum capacity of 1 kW; all other generation must have a minimum capacity of 20 kW. The maximum capacity for any customer’s single billing account is 150 kW and customers may participate on a first come, first served basis. The program will commence beginning _____________and end December 31, 2010. The Company reserves the right to extend, modify or terminate the experimental program. Service is limited to a total capacity of 2,000 kW, of which 500 kW is reserved for sites at which the Company provides distribution service to a Residential customer.

And I’m not even touching all of the hidden surcharges that exist in the contract.  If you generate too much power, you get an additional surcharge added to your bill.  Nice, eh?

So, let’s say that you sign up for a one-year contract (the minimum contract length specified in the document) after spending something like $10,000.00 on a solar outfit.  And let’s say you produce the maximum amount of power allowed by the contract for the year in 2009.  That comes out to:

500 kWh x $0.650 / kWh = $325.00

In essence, you spent $10,000.00 to make $325.00 dollars, selling your energy to the power company.  For 2010 and beyond:

500 kHh x $0.525 / kWh = $262.50

In order to actually see a return on investment with this plan, and using the 2009 rates, it’d take you around 38 years to reach the break-even point.

But wait, it gets better.

Remember that $25.00 monthly fee the energy company charges you for “selling” your power to them?  Do the math:

$25.00 / month x 12 months = $300.00

$325.00 made from generating power – $300.00 in monthly fees = $25.00 profit.

So, in short, even if you manage to generate the maximum amount of power allowed by the contract, you’d make a whopping $25.00 from the power company.  Anything less, and you owe the power company money for the power you’re providing to them.  And in 2010, you’d owe them some $37.50 if you generated the maximum limit for the year.  So, if we use the best case numbers, it would take you around 400 YEARS TO BREAK-EVEN ON THE SOLAR EQUIPMENT YOU PURCHASED TO SAVE OR MAKE MONEY ON THIS SCAM.

Mind you, this scam has already been reviewed by the Michigan Legislature.

Now, for those not familiar with Michigan, energy companies and utilities are essentially quasi-state run monopolies.  It’s been that way for decades.  Only recent legislation allowed competition in the power markets, and these were limited strictly to industrial and business sectors.  Residential power suppliers are basically protected by the state.  So what we have is a de facto arm of the Michigan State government perpetrating a fraud on its own citizens.

It really does give a new spin to the definition of “green energy,” except the “green” part is the money they steal from their customers.

What else would you expect from a state run by a bunch of liberals like that Canadian socialist Jennifer Granholm?

Advertisements

2 Responses to Yet Another State-sponsored Enviro-scam

  1. Dane says:

    There are less expensive ways to install solar panels. If you go with a company installing these panels, it will absolutely cost you thousands of dollars and many years to recoup the cost. You are correct on that point. Thanks for the info!

  2. unknownconservative says:

    Dane,

    Yes, you are correct. If you do it yourself, you can save money. Unfortunately, the money you save is nowhere near the costs of the actual hardware, from what I’ve read.

    But this brings up another point: building codes. If you do your own electrical, you have to apply for building permits, deal with inspectors, and know the electrical code. All of this costs money and time (and frustration).

    Or, you can let a licensed professional, who knows the process, handle it.

    And, there is no guarantee that the power company will allow a do-it-yourself-er to connect up to their $25.00-a-month box (that ends up costing you as much, if not more than you make). They very well may demand that solar panels be installed by licensed union people. Michigan is a BIG union state. If you want to be an electrician, you MUST be in a union.

    So, in the end, for most people DIY installation is not an option.

    Not that it matters much. It is a scam in the first place.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: