Pollyanna and a pile of money make for bad energy policy. Yes, American ingenuity and entrepreneurial spirit are famously creative and productive. However, simply repeating that mantra while heaping subsidies on the politically well-connected and mandates on the rest won’t make solar power more affordable or reliable.
For sure, solar power makes sense in certain applications. If you’re far from the grid with low power demand, solar can work for you. Want to charge cell phones in middle of Chad? Solar panels could be the right answer. And my solar-powered watch has kept perfect time for over five years with no battery changes. But when it comes to providing reliable, utility-scale, baseload power, solar faces formidable technical and environmental hurdles.
The most daunting, perhaps, is sunset. Clouds, snow and other weather changes also significantly limit solar power output. Since every power grid must continuously balance supply and demand, spikes and dips in solar power output must be offset with instantaneous cuts or additions from other sources, such as natural gas.
“Green energy” may conjure images of butterflies and national parks, but solar power presents significant environmental problems, from the toxic wastes of solar-panel production to the incineration of flying wildlife at concentrating solar plants. And solar farms require far more land than a conventional power plant generating the same output.
Many, if not all, of the problems can be addressed, but it will cost. Like growing tomatoes in Antarctica, it’s possible, but why bother when most of the rest of the world is much better suited to agriculture. We face a similar problem with ramping up solar power from wristwatch scale to utility scale — there are other sources of power that are much more reliable and affordable.
The Pollyanna response is that we should use government to make solar energy affordable and reliable. However, government policies promoting solar energy are in opposition to the we-can-do-it American spirit. The can-do attitude and freedom to pursue it were the driving forces behind the greatest energy innovation of the past 50 years — the smart drilling technology that gives us access to so much new natural gas and petroleum that we have reversed the trend of manufacturers moving production overseas and we have broken the back of OPEC.
Instead of putting faith in free minds and inventiveness to provide Americans with the affordable and reliable energy they demand, our solar-energy policies have imposed huge costs on consumers and threaten to cause electricity rates to skyrocket (to borrow a term from President Obama). Solar-energy policies range from the infamous to the insidious.
The owners of Solyndra used their political connections to get more than $500 million in loan guarantees. The Department of Energy put millions into Solyndra even as the proprietors knew the company was crashing and burning. In a hilarious fit of understatement, the department’s inspector general concluded, “We also found that the Department’s due diligence efforts were less than fully effective.” Hey, what do you expect? It wasn’t their money, it was the taxpayers’ money, and they lost it all on that one loan.
Solyndra’s was far from the only green-energy loan that went sour, but an even more disturbing aspect of the loan program was that it channeled billions to companies that don’t need taxpayer support. Solar projects owned by companies such as Goldman Sachs, BP and Chevron were propped up by billions of dollars in special federal loans. Another large corporation, the Spanish Abengoa, received $2.7 billion in loan guarantees. This loan is now at risk as Abengoa is threatened with bankruptcy.
The Abengoa bankruptcy highlights why green-energy subsidies are a bad idea. In his first term, President Obama pointed to Spain as a role model for our own energy policy. The European Union provides similar object lessons. Germany and Denmark have the highest share of electricity from renewable sources (wind and solar), but they also have the highest electricity prices in the EU. Their citizens pay about three times what the average American pays. Because of the unaffordability of subsidizing and mandating renewable energy, Germany, Denmark, Britain and Spain are cutting way back on their support for solar power. The cut in subsidies is the prime cause of Abengoa’s impending demise, which lays bare solar’s claim of competitiveness.
History proves that America can solve its energy problems when producers and consumers are free to make their own best choices and rid of government meddling that blesses the powerful with largesse and burdens powerless with higher costs.
David W. Kreutzer is a research fellow in energy economics and climate change in The Heritage Foundation’s Center for Data Analysis. He wrote this for InsideSources.com.