Tipping the scales on renewable energy: costs, benefits of going green

Tipping the scales on renewable energy: costs, benefits of going green
Above, workers install a solar panel at the Little Buffalo Solar project in northern Alberta. Illustration courtesy of Melina Laboucan

The North is well known for its high cost of living, a major component of which is the price of energy. For years, NWT residents have been calling for more affordable energy, an issue that has been discussed at length both in energy charettes and in government.

At what point do people look for alternative energy sources? Is this a task to take on as a community or as an individual? What is the tipping point for green energy?

The Journal contacted the Arctic Energy Alliance, to see what their technicians had to say.

Before making the switch to an alternative energy source for your house or community, senior technology specialist John Carr suggests taking stock of your needs. Where are you located? What natural resources are most easily available to you? How long are you willing to wait to receive a payback for purchase and installation costs?

“The tipping point at which point (switching) becomes economic really depends on who it is,” Carr said. “Some people are willing to accept a 15- or 20-year time frame to get their investment back. Other people want it much quicker. Businesses in particular want more like a five-year return on their investment. There are a lot of people you might call “early adopters” who are putting solar panels in right now with their own money because they feel some kind of ideological motivation to do that as opposed to an economic one.”

Of the available options, solar panel installations are becoming ever more popular. Prices on the investment have steadily declined over the last 30 years, to the point where the cost is often equal to or less than retail energy prices. With net-metering systems that allow excess energy to be injected into the power system in return for savings, as well as the option to save excess energy in batteries, the investment has become attractive to many.

In a community that is already on a hydroelectric system? The tipping point for renewable energy may be higher than in a thermal community or a bush camp, both of which often require shipments of fossil fuels to operate.

“If you’re putting solar panels into Fort Smith there’s an economic component, obviously you’re going to save some money on your power bill, but the environmental component isn’t there,” Carr said. “You’ve already got this renewable, emissions-free hydroelectricity and then you’re manufacturing solar panels. Often now they’re coming from China, which is why they are so much cheaper, so they’re burning a lot of coal in China to make these solar panels and then transporting them over and you’re installing them. You’re not creating any environmental benefit, you’re not offsetting the use of fossil fuels, you’re offsetting a clean, renewable resource, so you’re actually creating a net damage to the environment.”

Subsidies may also impact the economic reality of investing in renewables.

“Most residences have subsidized electricity at a Yellowknife rate,” Carr said. “If people are below the threshold for the subsidy, they’re paying the same rate for their electricity as Yellowknife, so the cost of installing a solar system in a remote community is going to be higher but the savings are going to be the same as if it was in Yellowknife.  As long as the government is subsidizing the electricity, it actually creates an artificial situation in which these other technologies don’t have as good of an economic performance.”

At the end of the day, the decision comes down to a question of economics versus ideology, Carr said.

“There’s no one answer for what’s the tipping point. It really depends on who you are, where you are what your motivation is.”

An NT Power map illustrates existing solar infrastructure across the NWT.

Photo: Illustration courtesy of NT Power

An NT Power map illustrates existing solar infrastructure across the NWT.

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