Hayek’s “Use of Knowledge in Society” illustrates the profound challenges that well-meaning but arrogant market planners have faced from widely dispersed market knowledge inadequately understood by domineering politicians, technical engineers, greedy corporations and suffering consumers.
Artificial Intelligence and battery-powered cars demand more energy. France and China are progressive nations, but they adopt diverse energy production toward which Californians might flee!
‘Carbon Neutral’ Idealism
Despite California’s milder climate, Energysage.com says, “On average, California residents spend about $2,868 per year. That’s 28% higher than the national average electric bill of $2,245. … Over the next 25 years, you should expect to pay $147,000 on electric bills in California.” The SF Chronicle writes about the recent surge in prices: “costly startup investments in renewable energy and the transmission lines needed to connect new solar projects to the grid. Wildfire-related costs began driving prices even higher starting in 2020…” Is global warming the bogeyman?
Newsom dreams of electric cars by 2035 and energy renewability by 2045, but fossil fuels supply 37% of California’s power. “Instead of shutting down natural gas power plants,” argues Edward Ring, “California should be converting them all to combined cycle where the excess heat drives a parallel steam turbine, allowing efficiencies of up to 60 percent.” Meanwhile Trump shouts “drill baby drill” while touting nuclear and coal as he stalls ongoing solar projects like Esmeralda 7 with reduced permitting, credits and subsidies.
The California Air Resources Board demanded that drivers use CARBOB gasolene to improve air quality; chronic supply deficits hurt consumers far more than “Big Oil.” Ports are crowded and new pipelines face permitting constraints while California limits local drilling. Onshore wind is reasonable, but Humbolt and Morro Bay oppose offshore wind plants. Nuclear saves air pollution but Morro Bay is shutting down as we hypocritically import dirty energy from other states.
CPI reports that CA is now roughly 17% solar powered, 11% wind powered and 14% hydroelectric. “Allowing for panels sufficient to generate 961 gigawatts,” warns Ring, “…it would take 4,600 square miles of California’s land to replace natural gas and gasoline.” Irregular sun and wind hamper renewable energy, but MSN says: “California…Battery storage…has grown more than 3,000% in six years…” Overlapping permits and NIMBY obstructions delay solar transmission lines by about 19 months to reduce competition.
With 20% of California’s refining, including Valero Benicia, going offline this year due to high costs and “regulatory pressures,” California’s elected officials consider that high pump prices result from overly aggressive environmental policies. CALMATTERS reported that “Gov. Gavin Newsom today signed a sweeping package of climate and energy policies to…increase oil drilling and allow the state to create a Western regional electricity market.” “Too little, too late,” I say!
Proclaiming Energy Independence
Defy politics for personal solar and wind: Newsom eliminated fair sales pricing to utilities and Trump canceled federal tax credits. My 28-panel solar system had high initial costs: $12,000 for panels, $10,000 for control systems and wiring, $8,000 for two batteries and $10,000 for the electrician. My $3,000 wind turbine ties into the same batteries for about $5,000 and Octopus Energy predicts “…the ROI can be around 7.5-8%…” Financed by a Home Equity Line of Credit, I save about $9,000 in power yearly with breakeven expected in seven years. Small scale solar contributes half as much power as utility scale facilities to generate 25-year lifetime savings of about $55,000-$85,000.
Energy economy and time shifting batteries go together as we store midday and summer electricity for higher evening use. Run dishwashers and laundry midday or pre-cool homes while charging EVs. Solar loans or HELOCs give quick savings but increased interest. Solar leases give lower savings and complications with home sales. With spare capital, solar purchases give the lowest total costs and best returns on investment.
As we all await fusion power, solar and wind power are worthy financial hedges against outages and expected price increases. Until politics adopts growth-oriented policies, they are the only choices individuals can make if they insolently stay in these beautiful woods!
Edward Ring argues in Fixing California: “A measured all-of-the-above strategy for energy can be primarily accomplished by deregulating nuclear and natural gas energy solutions, allowing them to compete with the emerging solar, geothermal, and biomass solutions. Affordable, abundant, sustainable energy is a realistic, moral choice.”
Robert Arne, EA, CFP, MS, of Carpe Diem Financial Life Planning, is a Santa Cruz Mountain Certified Financial Planner who gives holistic financial advice as his client’s fee-only fiduciary. These articles are not personal financial, mortgage, tax or investment advice; consult appropriate professionals. Learn more at www.carpediem.financial.
