GE is looking to cut the cost of solar panel installations in half by engineering a system that would make it possible to roofers and contractors to perform the installation as opposed to higher costed specialized labor. They want to get the total cost down to roughly $21,600 (from roughly $35,000).
Here’s how our Federal government can quickly solve energy problems as well as stimulate the economy in a real manner. We all know that Obama and Congress love spending money. Heck, throw W into the spending mix too, and you have the largest deficits and national debt in the history of the world! Unlike most spending our Federal government does, this spending would actually bring about some real value to America.
Our Government Just Prints More Money Anyway
Spend another $700 billion dollars to install the $21,600 systems on homes in America. Now, the first argument might be that we need to evaluate whether there is enough sun coming in to make this worthwhile. Well, good news, someone has already done that! There is plenty of sun hitting the majority of the United States to make this worthwhile.
The $700 billion investment would put solar systems on approximately 32,407,407 houses. Now, that’s not taking into consideration economies of scale. Manufacturing that many solar panels and performing that many installations would considerably drop the costs associated with the installations. We could easily see a 20-30% drop in total cost, but I’ll stick with the 32.4 million installations for easy math. That’s roughly 24.93% of the estimated 130 million houses in America. With these solar panel systems producing an average of 85% of the house’s energy needs, that means a drop in existing energy consumption by 21.19%
What would happen if our need for energy from existing sources dropped by 1/5??? Well, simple economics would shift the price of energy down. For global warming worriers, it would mean production of 1/5 of our energy now comes from solar. Of course, it wouldn’t really mean a drop in household energy cost by 20 percent. Production from other sources would decline to keep prices from plummeting by 20 percent, but there would be a substantial decline in the cost of energy for the end consumer. Even if it was a 10% decline, I’ll show you at the end just how substantial this could be!
True Trickle Down Economics
Now, let’s get into the worker value! Solar panel production would skyrocket. Solar panel producers would need to hire more employees, put more people to work, order more materials from their suppliers… It’s true trickle down economics. But that’s just the production side of things! There’s the installation side as well. Thousands of workers would be put to work making good, hard-working money! These workers would be driving, eating, buying clothes for their families, etc. True trickle down economics. Local economies around the US would greatly benefit from this massive rise in employment and their subsequent spending!
Now, let’s talk about the true economic savings as energy costs in the United States drop by 20% I’ve mentioned in Energy Based Inflation that rising energy costs have an impact on EVERYTHING. There’s no escaping the cost of energy in our current economy. Every company and every job requires energy. For some companies and some families, energy is a massive expense! For someone like me with a house but no kids, my electric bills are very low. Still, my house could produce enough energy for me and half of what the family that lives across the street from me needs!
But wait! There’s more!!!
Electric cars will become viable global warming worrier alternative energy vehicles. Currently, electric cars don’t really save much (if at all) in greenhouse gas emissions because of the fact that America gets so much energy from coal… This solar panel plan would make electric cars much cleaner than gasoline cars, since American would not be getting 21.19% of our energy from solar. Greenies rejoices!
So, what would the ROI be for our Federal government to print another $700 billion dollars? Well, we can start with the amount that Americans spend on electricity (Retail Electricity): $350,438,000,000. Yes, that’s $350 billion Americans spent on energy in 2009. Now, earlier I reasoned that while there is a 20% energy savings, our costs would only drop by maybe 10% because production from other sources would adjust to compensate for the sudden massive increase in energy production by solar. Even at just 10% that means Americans will be saving $35 billion (yes, BILLION with a B) in energy costs/year.
Collectively, we can go spend that money on other things, save it, invest it in retirement funds/stock market/kitchen remodel, etc. The savings for $35 billion dollars would significantly stimulate the economy because we aren’t just going to sit on that $35 billion. We’ll spend/invest it! We, the people will stimulate the economy from a legitimate and long-term value add from our Federal government. Much better than a couple of $600 “stimulus” checks we got from W! Or the great W/Obama bank/auto bailout.