solar subsidies

Washington, DC – This afternoon President Obama will visit Solyndra Inc., a solar panel manufacturing facility in Freemont, California that received a $535 million taxpayer-backed loan guarantee from the stimulus package. This facility employs 1000 workers and has the ability to build 230 megawatts of solar panel capacity per year.

Following are a few facts to keep in mind regarding solar energy:

  • Solar energy is not an infant technology – actually, the first solar cell was built in the late 1800’s; the great physicist Albert Einstein received the Nobel Prize in 1921 for his work with photoelectric.
  • The Energy Information Administration (EIA) estimates that total Federal subsidies for electric production for fiscal year 2007 from solar power are $24.34 per megawatt hour, compared to 44 cents for traditional coal, 25 cents for natural gas and petroleum liquids, 67 cents for hydroelectric power, and $1.59 for nuclear. Solar subsidies for non-electric production in fiscal 2007 totaled $2.82 per million Btu, second only to ethanol/biofuels at $5.72 per million Btu. (EIA Report, Tables ES5 and ES6.)
  • In 2016, the levelized cost of solar thermal is 26.37 cents per kilowatt hour (in 2007 dollars) and for solar photovoltaic, it is 50 percent higher, 39.57 cents per kilowatt hour. The costs for solar technologies are higher than that of natural gas combined cycle, which costs 7.99 to 8.39 cents per kilowatt hour. Pulverized coal and coal-fired integrated gasification combined cycle have levelized costs at 9.46 and 10.35 cents per kilowatt hour, respectively. EIA includes a 3-percentage point increase in the cost of capital when evaluating investments in greenhouse gas intensive technologies, such as these coal projects, which is equivalent to a $15 per ton carbon dioxide emission fee, and a 2 percentage point reduction in the cost-of-capital for eligible renewable technologies under the loan guarantee program of the Stimulus Act.
  • Just last year, President Obama visited the DeSoto Solar Center in Arcadia, Florida. At the time of his visit, the DeSoto field was the largest solar photovoltaic generating center in the United States – it employs two full-time staff and a few part timers one week a month during the rainy season to cut the grass.
  • The U.S. ranks fourth in the world for cumulative installed solar electric power. Germany is first, Spain is second, and Japan is third.

Spain and Germany, two countries that have historically provided the renewable energy industry with heavy subsidies, have recently scaled back the handouts. Why, you ask? There is a debt crisis in Greece, but also because solar is unsustainable, not economically viable and artificially drives up the price of electricity, which reduces competitiveness.

Another interesting set of facts with renewable energy is the cost of these government supported “green” jobs. For example, a single solar industry job in Germany received a per-worker subsidy as high as $240,000, while Spain has spent upwards of $754,000 per green job created. It doesn’t take a rocket scientist to see that these are expensive jobs that creates expensive energy that is intermittent and unreliable.

While the subsidies to support the solar industry in the United States are sure to continue under this Administration and probably the next, one thing technology won’t overcome is the fact that solar energy in intermittent (the sun doesn’t shine all the time) – and cannot produce energy on-demand like the American economy requires.

More from IER on Solar Energy:


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