Solar Power Economics

October 24, 2014

Here’s an example –albeit of limited scope- of how solar power could be used to reduce unemployment. An Arizona-based private company will build a 60-megawatt solar power plant on 600 acres of dry, vacant land near Mendota, California, a drought-stricken community with near 30% unemployment about 25 miles west of Fresno.  When fully operational, it will produce enough power for 20,000 homes in California and create about 400 temporary and 50 permanent jobs. The company will then sell the energy to Pacific Gas & Electric (PG&E).

Without a doubt, the project will bring some much needed relief to an agricultural community that has been devastated by a pervasive drought. Without water, farmers have been forced to fallow 200,000 acres, one third of their land –and eliminate jobs. Long term, however, this should be considered an interim step to eliminate unemployment, not just reduce it, and to substantially increase the income of the owners of those 20,000 homes the project will serve. The ripple effect of an economic transfusion on that scale and magnitude would increase consumption, which accounts for about 70% of the U.S. economy, and spawn a true recovery with long term, sustained growth. Better yet, it could create a model which other communities and even whole nations might want to emulate.

A Better Alternative
If all the homes in the area were to be outfitted with solar panels capable of generating a surplus of electricity, that is, more energy than they consume, homeowners could then lease the grid lines from public utilities to sell and deliver the electricity directly to specific users. That would divert the profits from the utilities to the homeowners, a powerful incentive to produce as much as possible. This is not socialism; it is simple recognition that modern technology has made large generating plants powered by nuclear or fossil fuels obsolete and vulnerable to acts of terrorism. The sooner we accept that reality and begin the inevitable transition to a new model the better off we’ll be. With solar there’s no reason why homes must be interconnected with each other unless for a specific purpose such as conquering drought or ushering in the Age of Hydrogen.

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