A new concept: thinking ahead about energy

By Dogtown Commoner | Posted at 2:00 am, November 7th, 2007 | Topic: environment, cities, economics

This is good news:

The Berkeley City Council has given the green light on a new green initiative: a solar power loan program that would be the first of its kind in the nation.

The council unanimously approved a concept put forth by the mayor’s office that would loan individual property owners the up-front cost of installing solar panels; a fee that costs $20,000-30,000 depending on the size of the home.

Solar power isn’t a solution to all our energy problems, but programs like Berkeley’s are a step in the right direction — that is to say, programs like Berkeley’s are a step away from coal and petroleum as our main energy sources. Yes, solar panels are expensive, but we need to re-think what we mean when we talk about the cost of energy. Cost comparisons shouldn’t just involve the price of solar panels versus the price of one’s regular monthly electric bill. There are other costs associated with coal-based electricity that don’t appear on a monthly bill — such as the costs of dealing with air pollution, global warming, and other consequences of our carbon-based power sources. These are long-term costs that are shared widely among the population and future generations, and therefore these costs aren’t included in monthly bills, but that doesn’t mean they don’t exist.

Berkeley’s proposal isn’t only good policy because low-interest loans will enable some environmentally-minded homeowners to install solar panels who otherwise wouldn’t be able to afford the upfront costs. It’s also good policy because it recognizes that individual homeowners making personal cost-benefit analyses have little incentive to shell out a lot of money for solar panels. The cost of solar panels is borne by individuals, while the true costs of coal and oil are borne by all of us, and future generations. By fronting the money for solar panels with low-interest loans, Berkeley would be giving its residents an incentive to make cost-benefit analyses that include long-term, shared costs which will never be reflected in one homeowner’s monthly electric bill.

The reality is that almost all individuals will make decisions based on rational economic self-interest. Who can blame them? That’s why it is so important for politicians — whose job it is to look out for the community at large — to think beyond the daily price of gasoline and electricity, and start implementing innovative policies that will help deal with ALL the costs — present and future — of our marriage to fossil fuels.