Joined: Sep 2009
Solar Subsidies Follow Path Well Known to Oil, Gas, Nuclear Industries
SUN MAY 06, 2012 AT 07:01 PM PDT
Solar subsidies follow path well known to oil, gas, coal and nuclear industries
When the solar manufacturer Solyndra went bankrupt, the critics had a field day with the Obama administration because of its $500 million loan guarantee to the company. It wasn't just evidence of favoritism and corruption that the likes of Republican Rep. Darrell Issa went after. It was the whole idea of subsidies to clean-and-green energy in and of themselves.
Much of the criticism was hoary ideological claptrap: the government shouldn't be picking winners and losers; there ought to be a level playing field among all energy sources; solar can never supply more than a teensy fraction of our energy needs; the renewables industry has gotten subsidies no other industry received. Ad nauseam.
Thirty-two years ago, when I still worked at the Solar Law Reporter, a publication of the Solar Energy Research Institute, a division of the newly minted Department of Energy, it was pretty much the same line of claptrap. On the technological side, solar, it was said, and wind-generated electricity and geothermal power and the other renewables, amounted to an ultra-expensive scam that would never be able to supply more than a minuscule fraction of the electricity needed to power the country.
Subsidies and, say, spending federal money for people like us to provide source material for laws friendly to solar (and wind, etc.) were a rip-off of the taxpayers it was said. Didn't matter whether these were as big as requiring utilities to buy power from renewable sources or as mundane as writing model laws for municipalities to govern whether a neighbor can plant trees that block a residence's solar panels. All nonsense said the naysayers. The engineering, it was claimed, would never be able to achieve what other sources could achieve. A happy fantasy at best. Just another Treasury drainer at worst, money that should go not to DOE but DOD.
Joined: Sep 2009
ASSESSMENT OF INCENTIVES AND EMPLOYMENT IMPACTS OF SOLAR
A mixed portfolio of energy options has allowed Americans to enjoy long-term economic
growth and prosperity. The federal government has engaged directly in developing each
energy resource in the mix, although the dollar value estimates of this federal support vary
considerably. In this report, we focus on a relatively new addition to the energy portfolio—
solar power. This assessment considers the diffusion of solar energy technology in the United
States in the context of the technology adoption process and federal engagement in
developing energy options. We examine historical and current federal incentives in energy
markets, focusing on incentives along the energy value chain and by stage of technology
adoption. Considering the growth expectations for the domestic and international solar
markets, we analyze the solar industry’s U.S. job creation and solar power’s potential
contribution to addressing peak-demand period power needs and other benefits to the energy
portfolio. We find that solar energy is following the same incentive-driven path as other
traditional energy sources before it, consistent with the government’s decision to incentivize
energy production for a variety of policy purposes. We also conclude that the federal
investment in solar energy could bring about a number of tangible benefits, including
increased employment, global business opportunities, and energy supply diversity.
Joined: Sep 2009
The study “Assessment of Incentives and Employment Impacts of Solar Industry Deployment,” commissioned by the Solar Energy Industry Association and carried out by the non-partisan Howard H. Baker Jr. Center for Public Policy concluded that "solar is on the path to becoming a mainstream source of energy for our nation,” says Baker Center Director Matt Murray.
A key finding: Government has provided subsidies and implemented legislation and regulation for all major sources of energy paving their way to gaining significant market share. The typical incubation period before an energy source gains 1 percent of market share is 30 years.
I'm not going to analyze the study here. Everyone should read it for themselves. As you do, take note that the idea solar and wind and other renewable sources can't provide a reasonable fraction of electricity via the grid and via systems like solar rooftop installations is being disproved right now. Wind supplies 19 percent of Iowa's electricity. That's the leader, but a dozen states have the same capability given the right policies. And some of them have established good energy policy, with required percentages of power to be generated by a certain deadline. Solar is only a blip in the statistics, it's true. But the amount of new solar installed last year nearly doubled the existing total.
Take away the subsidy now, the production tax credit in the form of a 2.2 cents per kilowatt-hour for the first 10 years of generation of utility-scale wind, solar and geothermal electricity producers, and the market for making the switch will dry up because these take huge investments. And utility investors want to be at least somewhat certain of their return.
The PTC expires at the end 2012. And already investors are shying away from projects. Because they don't know if it will be renewed before it expires or not. The usual suspects in Congress don't want them renewed.
These subsidies aren't required forever. They are meant to get the industries up and running and gaining enough market share to drive further innovation and lower costs. It just takes time. Like it did with other energy industries. The ones that still get subsidies of various sorts. While howling about the new kid on the block. The ecologically crucial new kid.