Is it worth the switch?
Whether you own a residential or commercial property—or are considering purchasing either at some point in the future—you have no doubt been considering switching to or incorporating renewable energy into your plans. With all the mixed opinions and information out there, it’s tough to decide what is best when it comes to energy over the long term. Let’s go over the main points of both types and some of the benefits and downfalls of each.
- Fossil Fuels for Energy
- Renewable Sources for Energy
- Costs for Both
- Stability of Both
- Benefits of Both
Fossil Fuels for Energy
Around 90 percent of energy is generated by fossil fuels, which includes crude oil, natural gas, and coal sources. Fossil fuels have been used for many years due to their inexpensive nature, but the use of them generates hydrocarbons that create greenhouse gases such as carbon dioxide in the atmosphere. This has negative effects on the environment, such as causing pollution and sulfuric acid—which makes acid rain—and creating the greenhouse effect, trapping these pollutants under the earth’s atmosphere. Fossil fuels are generated over millions of years by decayed organic matter under the earth’s crust that converts into oil, coal, or gas after so many years of receiving heated pressure below the surface. Because of the time it takes for them to convert, they are not a renewable resource—and experts predict that we will exhaust this resource in anywhere from 50 to 150 years.
Renewable Sources for Energy
Any of the earth’s resources that are naturally produced fall under the umbrella of renewable energy sources—for example, solar power, wind energy, geothermal energy, hydropower, tidal power, and even biomass. Solar and wind power are probably the most commonly discussed types of energy; hydropower is power that comes from falling or fast-running water. Tidal power is similar, except that it is energy generated from the power of the ocean’s tides. Geothermal energy is energy derived from heat that is stored within the earth’s crust. Biomass refers to the energy generated from burning organic materials such as wood, plants, and crops; while burning biomass does generate carbon emissions, it is still considered a renewable and sustainable source of energy due to the use of plants and matter that can be regrown. Essentially, any natural source that produces energy and will never run out is considered sustainable, renewable, and safe.
Costs for Both
Renewable and sustainable energy sources do require up-front costs to implement; this is an undeniable fact. Installing wind turbines or solar panels is still a relatively new technology that may cost a lot when compared with the lower prices for traditional fossil fuel energy. However, there are significant long-term cost savings with the use of renewable energy sources, including tax credits and deductions, especially for businesses. In addition, the prices of new technology always decrease with each breakthrough or upgrade that occurs; so there is a good chance that costs will decrease in the future, especially with more widespread use. Also, the prices for fossil fuels vary greatly, often spiking and falling rapidly and erratically; while the up-front installation costs for sustainable energy sources are higher, the long-term prices will not be subject to such fluctuations.
Stability of Both
Since renewable energy is sourced from nature, such as the sun, the wind, and water, it is a more stable resource than the fossil fuels that will eventually be exhausted. However, one good thing about fossil fuels is that they are easily transported and stored; renewable energy requires large spaces to collect and contain the energy. And since natural sources of energy are—well, natural, there may be times when the power production increases and decreases due to clouds, lack of wind, etc. This means that extra storage is required to save up the energy produced in the increased times to make up for the lacking times. However, looking at the bigger picture, it’s a safer bet to utilize resources that will always be around for the future—even if fossil fuels are not exhausted as soon as predicted. If fossil fuel energy usage is dropped down to even 50 percent, that creates more stability for future generations as well.
Benefits of Both
Both types of energy clearly have benefits to them—otherwise neither would be a viable option. The main benefits of fossil fuels are the lower costs and ease of storage as well as the fact that the harvesting of them generates jobs. However, the solar industry has exploded in recent years, generating thousands of jobs across the country as well; since fossil fuel energy usage is still at 90 percent, there is a lot of upgrading to be done yet, which means more jobs even into the future.
While fossil fuel sources are unevenly distributed across the planet, creating frequent cost spikes due to political unrest in oil-rich nations, renewable resources are equally and steadily available to all. Another benefit of switching to renewable resources is the fact that fossil fuels are used for many things other than energy, such as plastics and petrochemicals; since there is no substitute for generating those materials as of yet, the change to renewable takes some of the burden off of oil and gas. And of course, monthly energy bills are lowered with renewable energy; steady, lower prices are locked in and sustained. Also, renewable energy facilities require far less maintenance than traditional ones, which is another area of cost savings. Residences and businesses can receive tax deductions and rebates for upgrading to renewable energy systems—many state and local governments offer incentives for upgrades as well as the federal government (for a few more years, at least).
When considering the upsides and downsides of both renewable and conventional energy, one must look at the big picture—not only of energy and resources for a specific building or company, but of the economy, the country, the environment, and the globe. No matter which way you slice it, renewable energy is the way of the future, and fossil fuels will eventually run out. Considering the inexhaustibility of natural resources and the long-term cost savings in addition to helping provide a better planet for future generations, renewable energy seems like a win-win.
Walker Reid Strategies specializes in energy efficiency, focusing on 179D deductions and 45L tax credits. We partner with many energy and tax organizations to educate and advise the public on strategies for energy efficiency and related tax deductions and benefits. Contact us directly for more information.