Subsidizing Solar Power

  • John Wakeman of SUR Energy says government and utility incentives have lowered the costs of a solar installation for consumers.(Photo courtesy of Mark Brush)

Sources of renewable energy like wind, solar, and hydroelectric are still just tiny players in a world powered by fossil fuels. Most of the power for your light switch comes from burning coal and natural gas. Mark Brush reports the government is trying to change that. There are state and federal programs that will pay you to put solar panels on your house:

Transcript

Sources of renewable energy like wind, solar, and hydroelectric are still just tiny players in a world powered by fossil fuels. Most of the power for your light switch comes from burning coal and natural gas. Mark Brush reports the government is trying to change that. There are state and federal programs that will pay you to put solar panels on your house:

John Wakeman was laid off from his factory job eight years ago. So, for him it was, “well… Now what?” He’d always been interested in solar panels and wind turbines. So he decided to go into business helping homeowners put these things up. It’s been eight years, business was slow at first, but he says these days, business for solar panels is picking up.

“There are a lot of people that have always just dreamed of it. You know, they thought it was really cool, they looked into it in the ‘70s. In the 70’s it cost, you know, ten times as much for the same energy. The costs have really come down.”

But it’s still really expensive for a lot of people. Wakeman says a typical solar job costs around sixteen thousand dollars these days.

But now – you can get help from the government.

There’s a federal tax credit that will pay for 30% of the cost of new solar panels on your house. So you spend sixteen grand – you get $4,800 off your next tax bill. And on top of that, there are a bunch of state and utility operated programs that will help pay for the up-front costs.

In fact, more than half the states in the country are forcing utilities to make more renewable power.

So more utilities are paying people to install things like solar panels, wind turbines, and geothermal heat pumps.

In many places, it costs less to install these things than it ever has.

Wakeman says these incentives have been good for his business.

“I can actually build a business somewhat on that. I can hire some people and get them trained. You know we can go out and sell some systems.”

But some say these subsidies are not a good idea:

“The sunlight may be free, but solar energy is extremely expensive.”

Robert Bryce analyzes the energy business for the Manhattan Institute. It’s a conservative think tank. Bryce says solar power is enjoying big subsidies from the government right now, but it’s not translating into a lot of power going onto the grid:

“Solar energy received 97 times as much in subsidies per megawatt hour produced as natural gas fired electricity; even though the gas-fired electric sector produced 900 times as much electricity as solar. So how much subsidy are we going to have to give them to make them competitive. And I think the answer is going to be… It’s going to have to be a whole, whole lot.”

Bryce agrees – there are some big environmental costs to traditional fossil fuel sources. Costs that are not always paid for. But in the end – he says renewable energy sources like solar just can’t compete with traditional fossil fuels.

But others say the subsidies for renewable power are boosting an industry that is trying to get a start.

Rhone Resch is the president of the Solar Energy Industries Association. He says the subsidies renewables are getting today just make the game fair:

“We’re starting to get the same kinds of support from the federal government that the fossil industry has enjoyed for the last 75 to 100 years. And when you do that, the cost of wind comes down, the cost of solar comes down, the cost of geothermal becomes more cost competitive.”

If you look at the numbers, traditional power sources have always gotten more money from the government. In 2007, the federal government gave out 6.7 billion dollars in subsidies to support electricity production. Most of it went to coal, natural gas, and nuclear.

Today, renewable energy sources, like solar, are getting a little more help. And supporters hope that help doesn’t disappear – like it has in the past – when the political winds change.

For The Environment Report, I’m Mark Brush.

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