Category — Solar power
“One acre or 1,500 acres? 88 percent capacity factor or 22 percent? Less than $1,500,000 per megawatt of capacity or $6,400,000 per megawatt? Location near the customer load or remote? Highly dispatchable electricity or non-dispatchable? Do we need to really ask these questions.”
The huge California Valley Solar Ranch (CVSR) central-station solar plant is apparently now at “full power” thanks to a loan guarantee from the U.S. taxpayers of $1,237,000,000. Information regarding this project has been published here by Earthtechling, and also here, by the U.S. Department of Energy.
In an earlier article by Eric Lipton and Clifford Krauss in the New York Times entitled A Gold Rush of Subsidies in Clean Energy Search, the full cost of the project was established as $1.6 billion. Lipton and Krauss indicate:
The project is also a marvel in another, less obvious way: Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project. Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.
A Critical Appraisal
In a realistic appraisal of the CVSR we should note the following: [Read more →]
November 7, 2013 15 Comments
“It’s these subsidies and unfair billing credits–coupled with the intermittent nature of solar energy–that has utilities, utility customers, and taxpayers questioning the expansion of solar power. Until the solar industry can effectively operate in a free market and not burden consumers who cannot or choose not to install rooftop solar, this debate will continue.”
Solar power generation in the U.S. rose nearly 600% from 2000 to 2010 (NREL), and this trend is continuing. Fueled by an array of federal, state and local subsidies along with utility-bill credits, the economics of photovoltaic (PV) energy might seem too good to pass up. This is especially the case with residential or rooftop solar systems.
However, a closer look at industry subsidization, the unique properties of PV, and controversial billing practices for solar users, such as Net Metering, show that solar power is not as great a deal as its supporters would have you believe.
Economics of Rooftop Solar
For homeowners looking to add solar panels to their rooftops, there is no shortage of handouts to help make this possible. First, there is a 30 percent Investment Tax Credit from the federal government, in place until 2016. If not used completely at the time of installation, this credit can be carried over for up to five years. On top of that, state, local and utility specific programs sweeten the deal. These programs vary greatly by location. [Read more →]
September 30, 2013 5 Comments
“[T]here is no companion prerequisite that such renewable programs be cost-effective or deliver reliable power…. This program appears designed for the privileged few to enjoy a subsidized electric energy existence, provides those ‘green bragging rights’ mentioned by a solar installer in this courtroom last September, but little else.”
Last May, Dominion Virginia Power petitioned the Virginia State Corporation Commission to introduce a voluntary ratepayer program to support up to 3 MW from distributed solar installations. Dominion seeks to offer the public an alternative to an existing, net-metering, residential solar panel program. This voluntary test Solar Panel Program would be guaranteed for five years at a “buy all/sell all” $0.15/kWh. It would be limited to an initial maximum scale of 0.2 percent of 2010 peak load.
Solar is an intermittent power source that would require storage to be on a stand-alone basis. The Dominion program offers a solar energy buyback on a firm (non-interrupted) basis, which requires cross subsidization from conventional energies.
The $0.15/kWh price is below what the U.S. Energy Information Administration estimates to be the cost of distributed solar, which is north of $0.25/kWh. Multiple tax breaks explain the difference ($0.022/kWh production tax credit; accelerated depreciation, etc.). Solar executive David Bergeron has estimated that the as much as 90 percent of lifecycle solar costs are hidden, due to special government subsidies. [Read more →]
February 27, 2013 4 Comments
“Intermittent generation may be consistent with a liberalized market, as long as generators are required to bear all the direct and indirect costs of their production. Otherwise, competition is doomed to become an irrelevant feature of a system that becomes more and more politically driven.”
Can an intermittent source be integrated into a liberalized electricity market?
Yes, it is technically feasible, but no otherwise. If subsidies enter into play, intermittent generation might undermine the very design of the market. This is what happened in Italy with the boom of solar power, which last year alone skyrocketed from 3.47 GW to 12.75 GW, with the annual cost of subsidies increasing from 800 million euro in 2010 to 3.9 billion euro in 2011 (about $975 million to $4.75 billion at today’s exchange rate).
These very generous incentives (which have been cut back in the last year for complex legal reasons) led to an over-investment in solar power in the country.
“Perfect Storm” for Malinvestment
Italy’s perfect storm of so little electricity at so much cost had three causes: [Read more →]
July 20, 2012 5 Comments
“The range of energy possibilities grouped under the heading ‘solar’ could meet one-fifth of U.S. energy needs within two decades.”
- Robert Stobaugh and Daniel Yergin, “The End of Easy Oil,” in Stobaugh and Yergin, eds., Energy Future, Report of the Energy Project of the Harvard Business School (New York: Random House, 1979), p. 12.
”I think … the consensus … is after the year 2000, somewhere between 10 and 20 percent of our energy could come from solar technologies, quite easily.”
– Scott Sklar, Solar Energy Industries Association (1987).
“Before maybe the end of this decade, I see wind and solar being cost-competitive without subsidy with new fossil fuel.”
- DOE Secretary Stephan Chu, Address to Pew Charitable Trusts, March 23, 2011.
Yesterday’s Part I on the long history of solar power ended with two quotations from energy historian Wilson Clark in his 1974 book, Energy for Survival: The Alternative to Extinction:
“In 1908, [Frank] Shuman formed the Sun Power Company and convinced English financiers to back his efforts to build larger plants using the flat-plate collectors. In 1911, he demonstrated a plant in Philadelphia with more than 10,000 feet of collector surface. It produced 816 pounds of steam per hour and was used to operate a steam-driven water pump” (p. 365).
“Between the turn of the century and the 1930s in the United States, the first widespread commercial use of solar energy came into being with the installation of solar water heaters in California and Florida. . . . Tens of thousands of these heaters were sold in both states until the middle 1950s” (p. 370).
The rest of the century would be the story of certain tried-and-true applications (water heaters), a lot of better-but-not-nearly-good-enough technological progress, and hype and failure in the political energy era (1970s-to-present).
1930s Solar [Read more →]
March 22, 2012 6 Comments
“Not satisfied with such direct benefits as he derives from sunshine, man has developed numerous ways of utilizing solar radiation indirectly and of appropriating energies other than his own.”
– Erich Zimmermann, World Resources and Industry (Harper & Brothers, 1933), p. 43.
“Although much interest in the scientific community has been focused on solar energy at various times in history, widespread development of solar power equipment has never been achieved—primarily because of the high cost of developing solar power compared to that of technologies utilizing cheap fossil fuels.”
- Wilson Clark, Energy for Survival: The Alternative to Extinction (Garden City, NY: Anchor Books, 1974), p. 379.
Solar electricity has a long history, not unlike its cousin windpower. The infant industry argument does not apply, and solar’s diluteness and intermittency suggest that this off-grid starter energy will not be an on-grid resource this century if not far beyond.
But the hype continues. Yesterday at Climate Progress, Stephen Lacey argued in The Real Impact of Loan Guarantees: “Solar Is Now Bankable” and “Becoming Part of a Much Broader Capital Market“:
With panel prices hitting record lows and performance of projects steadily improving, solar photovoltaics have become increasingly attractive to large investors. Investment in solar has surged to unprecedented levels due to interest from large Wall Street banks, investors like Warren Buffett, and technology firms like Google.
Does Mr. Lacey want to get into the weeds of the cost and reliability of solar power, or is his just cover bluster for a politician of his liking to get over “big green lie” Solyndra?
Here are some quotations that put solar in its proper historical context, just in case President Obama does not share any during his visit today at the 48-megawatt Copper Mountain Solar 1 facility in Boulder City, Nevada. Part II tomorrow will look at solar’s history in the twentieth century–and the hyperbole of solar when energy politics entered the scene in the 1970s.
17th Century Solar [Read more →]
March 21, 2012 7 Comments
Many years ago at at a DOE/NARUC conference, I took note when Christopher Flavin of the environmental Left (EL) Worldwatch Institute commented that he didn’t support solar farms (macro solar) because of their large resource and land requirement. 1
‘Wow!’ I thought. That depletes the EL supply-side strategy, leaving just industrial wind and distributed (micro-solar)–and maybe a little biomass.
I was reminded of this when I read a recent article in ClimateWire (sub. req.), by Lacey Johnson, “Boom in Solar Panels injects NIMBY Battles into Neighborhoods.”
The story begins with Barbara Katz, whose hilltop home in historic north Baltimore, amid roaming wildlife, was threatened by her neighbor’s plan to install a 600-panel solar array. Johnson reports:
“My initial reaction was, ‘Oh my gosh, this is going to be an eyesore,’” remembers Katz, who was confronted by a plan for more than 600 ground-based solar panels on her neighbors’ lawn. “No one would want this in their backyard. It looks like it’s an industrial park.”
It takes a good deal of work — and regulations — to keep suburban communities looking picture perfect, and arrays of shiny solar panels don’t always fit the vision homeowners have for their neighborhoods. All over the country, citizens like Katz have begun organizing to block renewable energy projects, throwing a wrench into some peoples’ plans to “go green.” [Read more →]
January 27, 2012 5 Comments
“Without these subsidies … ‘On-grid PV,’ would be virtually non-existent. It only exists because the solar industry lobbied government officials to compel citizens to purchase this otherwise non-economic energy source.”
“Included in the list of failed solar companies is Solon of Germany whose corporate slogan was ‘Don’t Leave the Planet to the Stupid.’ Fortunately for taxpayers, it appears Solon will be leaving the planet.”
A recent Wall Street Journal article, Dark Times Fall on Solar Sector(December 27, 2011), surveyed the latest solar industry fallout, as well as overviewed the financial condition of the surviving companies.
But the article seems to mistakenly equate the fallout to viability as if better profits would mean sustainability. The industry is not viable, but this is unrelated to the recent fall-out. The industry was growing and profitable in the recent past and was equally non-viable then. The difference is that with profit-enabling government subsidies intact, many established U.S. and European manufacturers are now competing with China. And they cannot compete.
There is a measure of justice in this recent turn of events. The old adage “he who lives by the sword dies by the sword,” comes to mind. In this case, one might say, “the industry that lives by government intervention dies by government intervention.” [Read more →]
January 6, 2012 25 Comments
“Solar subsidies are a placebo which is giving the general public a sense of security about our energy future and is robbing the motivation of those entrepreneurs that could actually address our energy problems.”
“In the near term, perhaps our bigger concern than climate change is anthropogenic energy policy.”
In a recent Economist on-line debate, the affirmative motion “This house believes that subsidizing renewable energy is a good way to wean the world off fossil fuels” was surprisingly defeated.
In his closing remarks, the moderator softened his strident opposition to the negative case, even admitting that “subsidizing renewable energy, is wasteful and perhaps inadequate [to address
Beyond the Climate Debate
The debate, indeed, reopened the question whether anthropogenic greenhouse-gas forcing was a serious planetary environmental concern. But such focus short-changed what I think is the more important question for the Economist. Not only are the renewable-energy subsidies (such as for solar) wasteful and potentially insufficient, they are outright diabolical if indeed there is a looming environmental crisis.
I am not evaluating whether anthropogenic global warming is real and potentially cataclysmic; I’m arguing that if there is a valid concern about the enhanced greenhouse gas effect, not only will the subsidies not solve the problem, but may very well prevent or postpone a legitimate solutions.
Grid Solar: Radically Uneconomic, Intermittent
I’ve written before about why on-grid solar power is absurdly uneconomic and has almost no hope of becoming a viable alternative to current generation technology–or even competitive with other more viable renewable technologies. I’m asking the reader to accept this position for the sake of understanding the potential implication of my claim. [Read more →]
December 15, 2011 4 Comments
” The Solyndra technology was far from innovative, much less game-changing. The DOE … failed to quantify the elasticity of production costs in a highly competitive market where solar panels are a commodity.”
“Given the many other companies with shaky financials that have received loan guarantees, I expect we’ll see more and larger epic fails like Solyndra in the coming years.”
- Robert Peltier, “Epic Fail, POWER, October 2011, p. 6.
The seasoned warnings against politically correct, market incorrect technologies for electric generation by POWER magazine editor-in-chief Robert Peltier are now being vindicated. Peltier did not anticipate the unseemly crony capitalism involved in such cases as Solyndra, but he knew that there was trouble ahead because of the technological problems of converting very dilute, intermittent energy into affordable, dispatchable power flows.
November 1, 2011 3 Comments