Based on California’s new carbon market, how much to offset my house or a large solar array?
California recently opened the world’s 2nd largest cap and trade market. The first auction took place this week, setting the price of emitting a ton of carbon dioxide (CO2) at $10.09.
What does that really mean? To put it into perspective, I’ve calculated what it would take to purchase carbon offsets at this new market rate for my house and the value of CO2 offsetted by a large solar array.
Awhile back, I wrote a blog on the ecological footprint of my house in San Diego. I found that 3,553 lbs of CO2 was emitted to generate the 5,580 kWh a year my roommates and I used. If I wanted to offset this carbon footprint, using California’s new market rate of $10.09, it would cost me $17.92. Pretty cheap.
Now let’s say there was a hypothetical market in California for carbon offsets. A community wants to build a 100 kW solar array and receive a monetary value for the carbon it offsets. Using calculations from this site, a 100 kW solar array would be expected to generate 182,500 kWh a year. Using a ratio of 1.57 (the kWh my roommates and I used and the amount of CO2 generated), this would save the emission of 116,242 pounds of CO2 per year, or 58 tons.
Therefore, you’d be offsetting $580 worth of CO2 emissions with a pretty large solar array that costs at least $100,000, and may cost as much as $1 million. I don’t really know the cost of solar arrays when they get scaled that large.
My personal opinion is that this market rate is pretty cheap compared to the ecological impact our continued CO2 emissions have on the planet. The cap and trade market is designed to slowly increase this price, which should help, but until the price of emitting a ton of CO2 is much higher we won’t see significant price changes in using dirty energy, and thus behavioral changes in the people who buy it.