| Chieh on Education / renewable energy I have been attracted to the idea of renewable resources for a while now. Based on my research, a family using solar panels in their home would recuperate the cost after fourteen years. After fourteen years, the energy would become free. I discovered the same result with wind energy as well. In the long run, both solar and wind energy result in savings. So if the evidence suggests a net positive result, why don't we also use them for our schools? For some time, I refrained from adding this proposal to this book due to a lack of data on the amount of savings. Perhaps the amount of savings was so negligible that the effort would not be worth it. On the surface, however, the savings appear to be rather obvious. Depending on the size of the school, the annual cost of electricity is roughly between $500,000 and a couple of million dollars. If all of our schools could save this amount annually after recuperating the initial investment, the aggregate savings across the nation would seem to be a rather large sum. These estimates alone might be able to convince many readers, but let me also offer experimental results already done by some schools. One experimental result came from the San Jose Unified School District in California. They are installing solar panels to offset the cost of electricity in the schools. And from their data, the district expects to save $25 million in energy costs and reduce its power demand by 25 percent. This is within a span of twenty-five years. As an added bonus, the district also estimates that it will cut the equivalent of 37,500 tons of carbon dioxide emissions. In this situation, the transition to renewable resources turned out to be rather profitable. However, this does not mean that we should start similar projects in all our schools. There are many factors that determine the viability of such efforts, and as a result renewable energy is not necessarily suitable for all schools. But if we look at the country as a whole, we can still reduce a significant amount of our energy costs even if renewable resources are applied only to parts of the school system. In the case of the San Jose School District, the project would not have been possible without tax incentives provided by the California state government. Although switching to solar energy provided bottom line savings, some catalyst was still required to kick-start the engine. The school district also happened to reside in a sunny state. In other regions of the country, wind energy might have provided more savings. The fact that California has many innovative energy companies also contributed to San Jose's success. It should be emphasized that many considerations must be made to ensure profitability. A cost analysis should be performed to figure out the long-term net gain. If after going through all the considerations, the net gain is significant enough, then the government should work with the school system to finance such projects. This, in the long run, is how we can reap significant savings. The Numbers The biggest problem with solar and wind energy is the upfront cost. In many cases, our schools already have low budgets. Building such an expensive infrastructure is simply impossible. The only way for most schools to finance such a project is through borrowing from the government or from banks. This is where I think the government's involvement is essential. I don't think the government should just dish out cash to finance these projects, but the government could lend the schools the money or provide tax incentives for banks to become the lender. Let me propose a scenario to consider this issue. The schools have to pay an electricity bill, and normally that amount goes to the power companies. Now, if we were to implement renewable energy in our schools, we could set it up so that the schools would pay exactly the same amount to the lender. From the perspective of the school's balance sheet, nothing would have changed. But now, instead of paying the electric companies, the schools are paying off the loan. So on the surface, nothing would change until around sixteen years later. At that time, the loan would be paid off so the school would no longer need to pay either the electricity company or the bank. Every year after that, our schools would enjoy free energy until the solar panels themselves expire. So the formula to calculate the net gain is rather simple. How many years do we have to enjoy free energy until the solar panels expire? Once we have a loan, the interest rate will determine this factor. As long as the net gain is reasonable, I believe the schools should make the loan. As I mentioned previously, the net gain may not be positive enough for all the schools. But that will not be known until a cost analysis is performed. So my proposal, based on these observations, is that our schools should at the very least go through the exercise of such a cost analysis. If we were able to organize districts into larger units, we could further reduce costs by buying in bulk quantities. With government incentives, the alternative energy sector could finally reach maturity and result in further cost reductions. One final thought before moving on to the next section. We are essentially applying the concept of polymorphism here. By using our schools as power plants as well as education centers, we will greatly increase the utilization of the same real estate while helping reduce our dependence on foreign energy. On average, American schools operate only 180 days a year. This leaves the other half of the year completely underutilized. For those days, our schools would be able to collect much more energy than they use. That excess of energy could be pumped into the electric grid, providing our cities and towns with cheaper energy. |
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