Surprise: Solar Can Barely Survive Without Massive Subsidies

Sure, sure, rich folks and people willing to spend tens of thousands can gain access to solar power, and, it would be great if companies could develop cost effective solar for home use. I’ve long advocated for this exact thing. But, it is nowhere near as of yet, and can barely survive without subsidies

Rooftop Solar Providers Face a Cloudier Future

Just two years ago, SolarCity and other rooftop solar providers were Wall Street darlings, and prospects for growth were flying high, as enthusiasm for solar power was seemingly boundless.

After all, they had built a better mousetrap, allowing the masses to install environmentally minded solar power systems at little or no cost to them and to reduce their electricity bills at the same time.

But in two years, the landscape has drastically shifted.

Nevada recently rolled back the generous support it gave rooftop solar systems; 20 other states are rethinking their policies, as well. And despite the extension of an important federal tax credit last year, losses by rooftop solar companies have accelerated.

SolarCity, the nation’s largest provider of rooftop systems, is but the most visible of a cluster of companies, built with the aid of government subsidies and utility incentives, now facing deep uncertainties, despite unflagging consumer interest and surging growth in renewable energy.

And right there, in black and white, is the problem: to repeat, without subsidies, it can barely survive. The current model is based on these subsidies, mostly originating from taxpayer funds. Take them away, and the system collapses. They are too reliant on government rules, regulations, and whims. It’s all based on a crony/government capitalism system, rather than a system based on consumer demand.

One day solar will get there. That day is not now.

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11 Comments

Comment by Dana
2016-02-11 11:35:51

Even a site devoted to selling solar systems says:

Studies show that on average, solar panels return two to four times their cost in saved electricity bills and typically pay for themselves completely within 7 to 15 years. If you live in a state with good incentives, the payback period can be as short as 2 to 4 years.

This is where the J Boys simply don’t understand most Americans: government incentives are needed to help the systems pay for themselves, and even when those incentives help, people living from paycheck-to-paycheck don’t have the money for that 7 to 15 years to wait for the payback. replacing your electricity bill with a larger loan (or second mortgage?) payment to get the solar systems installed isn’t always a choice that a lot of people can take.

Solar power for residential use does make a lot of sense, but not everyone can afford it, and the federal 30% tax credit expires at the end of this year. and it should! Why should I have to pay more in taxes to help someone else install a solar system?

 
Comment by Jeffery
2016-02-11 12:36:52

What the D Boys refuse to acknowledge is that we massively subsidize fossil fuels by ignoring the costs of global warming and other environmental damages.

We subsidized tobacco for decades by ignoring the damage to human health. What are the costs of nearly 500,000 Americans dying each year from smoking related disease? Yet the tobacco companies made, and continue to make billions. At least fossil fuels are useful.

Similarly, we ignore the costs of fossil fuel use. The direct subsidies to renewable energy sources help level the playing field and should continue. Of course local and state governments are reducing their subsidies. They have little choice as we “cut” our way to third world status.

Another option is to tax fossil fuels to capture the costs of the negative externality of global warming and environmental degradation.

Let’s remember. Fossil fuels built our modern world.

Let me repeat. Fossil fuels built our modern world. Humankind owes a hat tip to coal, oil and gas. But, now it’s time to move on to improved methods. We have no choice.

 
Comment by Dana
2016-02-11 14:16:03

Jeffrey wrote:

Let me repeat. Fossil fuels built our modern world. Humankind owes a hat tip to coal, oil and gas. But, now it’s time to move on to improved methods. We have no choice.

We will . . . when they become practically available. The problem is that they are not yet practically available: the costs are simply too high, at least right now, for solar and wind power.

 
Comment by Stosh
2016-02-11 15:52:09

As a Nevada resident I’m very familiar with the solar power debate. The problem with solar and any alternative power source, Who is going to PAY for the public to adopt it.

Solar in Nevada was fine so long as non-solar rate payers were on the hook for the cost. Ask solar users to pay for their own costs and the scheme collapses.

 
Comment by david7134
2016-02-11 16:56:27

Jeff,
I see no problem with fossil fuels, if you and your bunch do, then don’t use them, that would truly be a unique solution. We could observe how well you do without the convenience of a very good fuel source. If you don’t like the CO2, then develop a filter for the problem. But all you want to do is tax and control. That is not a solution. Taxes as you propose will destroy what is left of the economy after your guy Obama has done as much damage as he can and would place a significant burden on those that can’t afford increased cost. What we need is more coal production as that results in cheaper energy and thus an improved economic environment. When you have a better solution, great, but you don’t have it yet.

 
Comment by Jl
2016-02-11 20:56:41

Didn’t think it would take this long, but J is on his fraudelent “fossil fuels receive massive subsidies” B.S. again, desperately comparing the process to what takes place with solar power. With solar, the government gives money to the solar companies to keep them running. Fossil fuel, and thousands of other companies, receive mostly tax breaks, which, after you’ve made money, you’re allowed to keep more of it. Which makes sense, because it was yours to begin with. Subsidized solar gives away taxpayer money.

 
Comment by Jeffery
2016-02-11 21:31:17

j,

You don’t understand, or more likely, you just ignore the argument.

 
Comment by Jeffery
2016-02-11 23:23:33

If you don’t like the CO2, then develop a filter for the problem

dava, Do you know how much CO2 is generated from burning 1 gallon of gasoline? About 18 pounds. Your proposed tailpipe filter would have to be hold 360 pounds of CO2 after burning a tank of gas!

You’ve mentioned on several occasions that if climate realists were serious they’d all just use CO2 filters.

Once you burn your tank of gas, what do you do with the 360 pounds of CO2 absorbed/adsorbed to the filter? If you burn a tank of gas a week that comes out to about 9 tons of CO2 plus whatever you use for the filter material!

Do you think it fair to just pump it into the atmosphere as we have been? Is it fair that others have to pay the price for you adding harmful CO2 to the atmosphere? Where’s the personal responsibility in that? The CO2 in the atmosphere has increased from 280 ppm to 400 ppm this past century.

If you smoked 2 packs a day in your office and your non-smoking receptionist of 34 years was diagnosed with NSCLC would you have any responsibility?

 
Comment by jl
2016-02-12 09:39:56

J-“you just ignore the argument”. Uh, no. The argument was solar companies wouldn’t survive without government hand-outs. Fossil fuel companies, who except in a few instances don’t get government hand-outs, but instead tax breaks, would. That is a true statement.

 
Comment by Dana
2016-02-12 13:11:45

I’d be perfectly willing to eliminate the tax breaks that industries receive, that all industries receive. Just treat them all the same: no subsidies, no breaks, no government advantages or disadvantages for any legal product, and let the chips fall where they may.

The government — regardless of who happens to be in power at any given time — seems to think that it can control or ‘adjust’ the economy, but the economy is 250 million people taking billions of economic decisions every day, and anyone who believes that the government can somehow manage that is deluding himself. Even in the old command economies of the Soviet Union and its satellite states, that never worked, which is why the Communist nations are on the ash heap of history. China survived by moving to capitalism!

 
Comment by Jeffery
2016-02-12 14:45:31

Dana,

I agree with you! But how do we factor in the cost of the damages that CO2 emissions are causing?

Fossil fuels receive a huge advantage in that the damage resulting for CO2 emissions is not factored in. This gives fossil fuels and obvious advantage over other energy sources, that are much less damaging to the environment and climate.

Would you agree that we subsidize the automobile and trucking industries with billions by building roads? What if instead of building roads at taxpayer expense we had build primarily subway and train infrastructure? The subway and train industries would have been delighted but the trucking and auto industries and the roadbuilders would have been hurt.

With any of the billions of transactions a year there can be negative externalities. Smoking kills 500,000 Americans a year. Gas, coal and oil are warming the Earth. How many billions do we taxpayers pay each year to repair the damage caused by smoking? Coal burning and auto exhausts cause “acid rain”, or did until a cap and trade system and vehicle emissions controls reduced the impact of this “negative externality”. Our use of chlorofluorocarbons is depleting the ozone layer but the chlorofluorocarbon, cataract surgery and skin cancer lobbies are not as dominant as the fossil fuel lobby, so we’ve been able to reduce the impact of this particular “negative externality”.

If your next door neighbor decides to open a goat farm with the constant noise, commotion, foul odors and flies, do you just figure “sucks to be me”? All he’s doing is raising goats and selling the meat and milk – just simple economic transactions – meat and milk for money. Unfortunately, a side effect (a negative externality, if you will) is that the traffic on your cul de sac is backed up all the time, the smell of goat urine/feces and offal (from him butchering the goats), the flies, the constant braying of the goats, is driving you and your family crazy.

Do you move? Do you sue him using the government courts? Do you propose government enforced zoning laws limiting his ability to make a living, perhaps by making him control the noxious odors and noise? Do you kill him and burn his family out?

In the next town over, they have zoning ordinances and safety rules forcing the goat farmers there to have a minimal square footage for each goat, that keep the farm a minimal distance from residences, and forcing them to dispose properly of the feces and offal – all of which increases the costs to the poor goat farmer.

Do you see that your next door neighbor is receiving a government subsidy since he can operate a similar business for a much lower cost, since his neighbors are absorbing his “negative externalities”.

Or a fraternal organization builds a meeting hall just behind your house in a residential area and decides to hold turkey shoots. You have 12g shotgun blasts going off 50 yds behind your house for 3 hours every Sunday afternoon. You can’t use your backyard then because of the noise and your wife fears an errant shot may hit a child or your dog. The Elks have a right to hold turkey shoots, right? They are just being entrepreneurial. What do you do?

 

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