Dollars and Sense For Energy

One of the most important yet overlooked points about the penetration of clean energy into the marketplace is that there’s pretty much only one thing that matters:  cost.  I’ve said it before and I’ll say it again:  people buy all sorts of things — clothes, cars, electronic gadgets — based on non-economic factors, but energy is purchased based on its price. 

Think of it this way:  How much attention do you pay to the price of a gallon of gasoline?  Of beer?

Generally speaking, energy is a commodity, hard to differentiate, making price the main purchasing factor.  So, when some people object to clean energy technologies, the primary basis for their complaint is typically that it costs too much relative to other (typically incumbent, typically dirtier) energy sources. 

“Making the Case for Clean Energy” by Gabriel Miller, Camilla Sharples and Paul Ho of Hudson Clean Energy Partners does a nice job of comparing the costs of alternative sources of energy supply.  In particular, there’s an excellent graphic in the article depicting the reduction in cost of new energy technologies over the past 100 years as they are introduced and gain traction in the marketplace — thereby giving lots of evidence in support of the claim that new energy technologies will get more cost-competitive over time.

While we can’t rest assured, and must work to make those economic gains happen, those of us in the cleantech space have nothing to apologize for:  if history is any guide, new clean energy technologies will get cheaper over time, and can in many (most?) cases become cost-competitive with fossil fuels — especially as they get scarcer and dearer.

2 replies
  1. Bill
    Bill says:

    Very interesting thought – thanks a lot. I have done some research on the web and found this new Siemens campaign that focuses on sustainable city development: http://www.usa.siemens.com/sustainablecities/inde… The question is who is going to pay for our cities becoming more sustainable and greener. I believe that it can only work, if companies and governments are working closely together and invest money wisely with a long term plan in mind. We need to make sure that the entire society benefits from this trend.

  2. brian
    brian says:

    for most people in my circle it comes down to the monthly payment. if we are going to buy a electric car there needs to be some special finance program, I'm not sure what but "what if a balloon" at the end of term say one third the cost of msrp?

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