Pay now or pay later: Navigating necessary (but high) costs of renewable energy

Panel: There’s no shortage of green energy ideas to help environment, just understanding of best means to fund their development and implementation

There still is plenty of room for debate on how quickly society should adopt more renewable energy sources — and which sources (solar, wind, electric vehicles, nuclear, hydrogen or others) should be used.

No one, however, disputes this: They come at great cost.

These costs come in three buckets — development, implementation and regulation — all of which can slow (if not stop) the move toward renewable energy.

Dennis Toft, chair of environmental law at Chiesa Shahinian & Giantomasi, spelled it out during a recent panel, “Let’s Get Real about Climate Change,” at CSG Law in Roseland.

“There’s a cost associated with green energy that has to be part of the equation,” he said.

Toft rattled off just a few: solar fields on top of landfills (which already is being implemented), recovering natural gas from landfills, electric vehicles, food waste composting, offshore and on-shore wind farms, hydrogen, even small modular nuclear.

“There are great projects and great ideas out there, but the first thing we have to deal with is addressing the regulatory hurdles for those projects,” he said.

Toft stresses that he’s not against regulation. In fact, he long has pushed for the necessary safeguards to be in place. Working with them requires capital.

The good thing: There are funding sources available.

“One of the great things that happened in the Inflation Reduction Act are the tax credits that were made available for green energy,’” he said. “We’ve had some clients take advantage of those, but not enough.”

Working clients through the process can be challenging, Toft said. IRS rules don’t necessarily reflect the reality of where tax credit should be applied, he said.

The market, Toft said, is quickly adjusting. For instance, it’s now possible to get insurance for tax credits.

Toft wants to see more.

“We need to keep thinking about, how else we can incentivize things in a way to further these projects to make the cost more manageable?” he said.

Some of that cost will need to come from consumers, Toft said.

“Everybody talks about wind, and wind is certainly part of the solution, but there’s a cost to it,” he said. “Everybody’s afraid electric cars are going to run out of power. We need to get the grid infrastructure done. That costs money. All these different things are part of the equation.

“We need, as ratepayers and taxpayers, to understand that, if we want to maintain what we have and prevent it from getting worse, we have to be prepared to pay the rates that are necessary to pay for wind and solar.”

Paying these costs is not an option, said Doug O’Malley, director of Environment New Jersey.

He noted a recent study that said the cost of dealing with climate change in the next generation will be $100 trillion — or three times larger than the current world economy.

“If we don’t act, we’re going to pay a lot more later,” he said.