It’s important to maintain perspective when we talk about energy and its costs, considering every angle of the issue and any proposed solutions or changes to existing institutions. Is the news stirring up a non-issue? Are legislators looking far enough ahead?
We talked about this with our post on the Solyndra controversy and our overview of solar tax credits.
Here’s another important thing to remember about perspective: what seems ‘cheaper’ at first blush might come with a handful of hidden costs. A peer-reviewed study titled, “Economic Value of U.S. Fossil Fuel Electricity Health Impacts,” was recently published in Environment International by Sarah Rizk and Ben Machol.
The report centers on a vitally important reality:
“Fossil fuel energy has several externalities not accounted for in the retail price, including associated adverse human health impacts, future costs from climate change, and other environmental damages.”
It seems obvious, but at a time when renewables are still in many ways fledgling, it is an important fact to remember and powerful when quantified. As Sarah Rizk, one of the researchers behind the study, explained to Forbes.com, “There are a lot of reports out there that quantify the total health costs and the total health impact values from fossil fuel energy in the U.S., but there are fewer of them that put it into a dollar per kilowatt-hour metric, which is what you see on your utility bill. We wanted to present it in a way that was digestible to the average consumer of electricity.”
By quantifying and valuing the health impacts from emissions and pollutants associated with different forms of energy production, they were able to show in real dollars how much of the overall cost is being externalized. They estimate that the annual costs of health impacts from fossil fuels at between $361.7 to $886.5 billion annually, a figure which they consider to be a conservative underestimate. At this rate, the valuations for health impacts by fuel type were found to be 19 to 45 cents per kilowatt-hour for coal, 8 to 19 cents per kilowatt-hour for oil, and 1 to 2 cents per kilowatt-hour for natural gas.
As they explain in the report, “For coal and oil, these costs are larger than the typical retail price of electricity, demonstrating the magnitude of the externality.”
The point of all this, explain Rizk and Machol, is that “on average, U.S. consumers of electricity should be willing to pay $0.24–$0.45/kWh for alternatives such as energy efficiency investments or emission-free renewable sources that avoid fossil fuel combustion.” By exposing the true costs of fossil fuel generated energy, renewables would finally be on a more even playing field. It turns out that solar is not so expensive after all.
Of course, this is nothing new.
- We’ve talked about how solar can save schools money and save teachers’ jobs.
- We’ve shown how electricity rates continue to climb and climb.
- We’ve written about the sad cost of fossil fuel disasters.
Which leaves us wondering, what will it take to finally turn the tide towards a clean energy future? The facts are glaringly clear. An International Monetary Fund report released on March 27 similarly pointed to the ‘mispricing’ of fossil fuels. Calling for an end to $1.9 trillion in annual global energy subsidies, the IMF report highlights the need for inclusive pricing so that polluters would finally be forced to pay the full environmental and health costs of burning fossil fuels. At Sunetric, we understand the challenges and opportunities that lie ahead as more people shift away from fossil fuels. We are deeply committed to creating a robust renewable energy future through providing the best quality product, service and technology to all our customers.