Cost Changes and Investor Opportunities Driving Renewable Energy

Mike Nicklas says cost changes in renewable energy sources are giving him hope for the future.

Nicklas is president of North Carolina-based architecture firm Innovative Design, formed in 1977 with a focus on energy-efficient and environmentally sensitive design.

He says when he got involved with solar thermal systems they were 60 to 70 cents a kilowatt (kW) hour, and are now four to five cents. Meanwhile, wind energy was $1.25 (US$) kWh and is now three to four cents.

Photovolatics — arrays of cells that convert solar radiation into current electricity — have dropped a “phenomenal” amount in the last year, he says, in the last six months decreasing from $5 per watt to $1.75/W.

“Just like everybody said, as soon as you start gearing up and you can get the manufacturing facilities big enough and the technology keeps improving it just gets cheaper,” he explains.

Utilizing the smart mix of renewable energy and efficiency strategies, Nicklas says the average energy cost in the United States would be 8 1/2 cents per kWh. Currently, the average energy cost is 1.8 cents kWh less than using the efficiency strategies.

“Right now the challenge is to close the 1.8 cent-per-kWh gap,” he says, adding carbon trading and government incentives are designed to close that gap.

“Once you close that gap it’s a lot cheaper,” he says. “(It’s) absurd right now to think about some of the technologies that are being implemented versus renewables.”

Having developed sustainable guidelines for Ohio schools, Nicklas says the four areas to implement energy strategies are energy-efficient appliances, solar hot water, daylighting and lighting.

For an average school he says the payback from these four aspects is about two years, and they can be implemented for $235 a peak kW. He compares this to the price of building a new coal plan in North Carolina, which would cost $3,500 a peak kW plus the price of coal.

In Haywood, North Carolina, Innovative Design is working on a creative arts building at the community college. The project will be put out to bid for a solar developer to finance, operate and maintain the solar systems.

These systems — including a solar absorption cooling system, a solar thermal space heating system and hot water solar thermal system — have traditionally been on open land and in large photovoltaic systems.

The efficiency strategies are paid back in two to three years. The solar developer would fund the systems and in seven years transfer the ownership back to the community college.

“This would enable you to get very high levels of efficiencies in your building with no money,” says Nicklas.

“It’s a benefit for everybody,” he says.

The investors are able to benefit from renewable energy tax advantages from the state and federal level, he adds.

“All the states that have these portfolio standards that are requiring renewable energy strategies this is an opportunity right now,” he says.

Despite the downturn in the economy he says this investor model is going well in his state.

“It’s a real win-win.”

Related Story:
Innovative Design Looks to the Sun for Sustainable Solutions

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