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Will Clean Energy Ever Be a Reality in the U.S.? Here's What's Standing in Our Way

Wind and solar sources make up almost half of all new electricity generation in Europe, but we're far behind in the U.S. -- so what gives?

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Roadblocks Remain

Two large economic obstacles remain: In the U.S., fossil fuels are still cheaper sources of power, and converting the nation's entire electricity-generating system would be costly and take decades.

The tipping point will be "grid parity," says Kapner, referring to when the total cost of installing and running a solar-power system becomes equal to that of buying conventional power. The equipment and installation are expensive, but after that, it costs very little. In the large systems now running in the Southwest, operating costs are as low as 1 cent per kilowatt-hour.

"You have to remember that the fuel is free," Masia says of solar, and the only maintenance needed is "you have to wash the dust and birdshit off" the panels.

Utilities are "technology-agnostic," says Prior; they "will do whatever is best for their investors and shareholders." The price of solar power from photovoltaics has come down to about 12 cents per kilowatt-hour, which is slightly less than the cost of power in New York City or Massachusetts--but twice the 6 cents that natural-gas power currently costs.

In 2009, wind made up 42 percent of all new generation capacity that came online, Prior says. The year before, the price of natural gas had reached $14 for a million British thermal units (BTUs), so utilities sought alternatives. But when gas dropped to $4 for a million BTUs in 2009, they switched back. In 2010, less than a quarter of new power came from renewables, while 35 percent came from coal and 38 percent from natural gas.

"The reason we have to subsidize is because the initial 20-year-cost is higher," says Zweibel of solar electricity. But in the long run, renewables are cheaper, says Mark Kapner. In Austin Energy's Green Choice program, he says, customers pay higher rates at first, but they don't have to pay increases for the next ten years, which protects them from the volatile prices of natural gas.

The Chinese competition has hurt U.S. solar-panel manufacturers, most notoriously the Fremont, California, firm Solyndra, which filed for bankruptcy in September after receiving more than $500 million in federal loans. When Solyndra was launched in 2007, says Masia, "no one anticipated" that the Chinese government would "invest very, very aggressively" in solar-panel manufacturing. Beijing has pumped $30 billion into it, says Zweibel.

Another issue is the time and money it would take to convert the U.S. power grid. About 3 percent of the U.S. generation infrastructure gets replaced every year, says Prior, so even if half of all new capacity were renewable, it would take until the 2040s for half the supply to come from renewables.

Globally, he says, whatever the U.S., France, and Germany do is "a drop in the bucket compared to what's being built in emerging markets." As industry expands in countries like China, India, and Indonesia, world electricity consumption is projected to rise from the 16 terawatt-years of 2009 to 28 terawatt-years in 2050.

What would it take to convert the U.S.? Prior says a combination of technological breakthroughs, cheaper solar panels, better storage, and either an increase in natural-gas prices or a carbon tax. If California's carbon tax raises the price of natural-gas power to 10 cents per kilowatt-hour, he adds, solar power will be competitive by 2014.

Paying the Price

Yet if we wait for the market to drive conversion to renewable energy, the Earth might be a scorched, drought-ridden, hurricane-battered planet by the time it happens. Power producers' bottom lines do not include what economists call "externalized" costs--the price of the environmental damage caused by pollution and carbon emissions. What to do about that is inescapably a political issue.

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