by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
…it’s well known that the renewable energy industry’s business model is entirely based on and utterly dependent on capturing public subsidies. It’s all about winning government goodies.—Yours truly, 8/28/15
You’ve probably heard this one. And if you have only a topical understanding of solar energy, you probably believe it. It takes a lot of lobbying and also a lot of media repetition and deliberate memory-holing to keep people thinking that solar is a viable, one-for-one replacement for traditional energy sources. See if this sounds familiar:
Amory Lovins of the Rocky Mountain Institute lamented the untimely scale-back of tax breaks for renewable energy, since the competitive viability of wind and solar technologies was “one to three years away.”
Was that in yesterday’s News & Observer? Was it in this week’s email blast to legislators by solar lobbyists? Was this at a recent university event?
No. It was from thirty years ago. That is, 1986.
It’s one of many, many examples of renewable energy lobbyists and apologists promising policymakers that their industry is “almost there.” It’s from a list compiled by the Institute for Energy Research (“Will renewables become cost-competitive anytime soon?“) not six days ago, but tellingly, six years ago. And as you’d see from the IER’s list, by 1986 the “one to three years away” justification was already old hat.
An industry entirely dependent on government help
MIT Technology Review noticed something:
This week shares of U.S. solar leader SolarCity tumbled to a new low, while several other solar companies also took a pounding. Last month Nevada introduced sharp cutbacks in its program for net metering—the fees paid to homeowners with rooftop solar installations for excess power they send back to the grid. California and Hawaii, two of the biggest solar markets, have introduced changes to their net metering schemes as well. Across the country, as many as 20 other states are considering such changes, which would dramatically alter the economics of rooftop solar.
The uncertainty has cast the solar providers’ business models into doubt. Without net metering payments, residential solar “makes no financial sense for a consumer,” SolarCity CEO Lyndon Rive recently admitted to the New York Times.
The rosier projections for grid parity usually assume that both net metering fees from utilities and government subsidies will continue. GTM Research this week released a report saying that rooftop solar is now at parity with grid power in 20 states, and will be in 22 more by 2020—if subsidies are included. Without subsidies, the picture looks a lot bleaker.
Even the article’s end-on-a-positive spin is dependent upon government help:
All the recent turbulence aside, it’s likely that solar’s longer-term future in the U.S. remains bright. Renewable portfolio standards, the state-level mandates that establish minimum renewable-energy requirements…
As always, the case for solar is that this amazing industry needs perpetual life support. And it’s getting government support unlike no other energy source, except wind, its partner in nondispatchability:
And what does it do with all that support? Look closely:
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