David Bergeron Special To The Arizona Daily Star
Posted: Thursday, December 9, 2010 12:00 am
The solar industry has asked the American taxpayer to make a considerable investment in subsidies for deploying solar photovoltaic (PV) systems in the hope these subsidies will drive down the price of PV to a point where subsidies are not needed.
Taxpayers have supported this on the promise that it will provide energy security, benefit the economy and help the environment. I'm writing today because I believe this good will is being abused. These systems are not as economical as the industry suggests.
But to see this, one must be able to look past the financial benefit to an individual homeowner and look at the economic effect of solar subsidies on the entire community. Subsidies have made solar electric systems appear attractive to homeowners that aren't sound for our state and country.
For clear thinking to prevail, we must learn to think in terms of the actual cost to the community versus artificial savings for the individual homeowner.
We are suffering from a myopic view of the cost and benefits of installing solar electric panels, and the industry is willing to wink and nod as these misconceptions spread.
Industry promoters have hidden the real cost and exaggerated the benefits of solar electric systems in an elaborate scheme of subsidies and net metering laws that give the illusion that solar is much more viable than it really is.
Here are the subsidized and unsubsidized figures for a 3 kW system in Tucson.
• Subsidized cost: $4,550 ..................Real cost:$13,500
• Apparent savings: $538/yr .............Actual savings: $132/yr
• Artificial payback: 8.5 years ............Real payback: 102 years
About two-thirds of the cost of a system can be recovered from utility, federal, and state credits, which the community pays through higher taxes and utility bills. Additionally, net metering laws force the utility to pay full retail price for much of this home-grown electricity, when the local utility could have purchased the same power for about 3 cents per kWhr from other sources. Utilities pass this overpayment onto the community through higher electric bills.
In summary, the homeowner pays about one-third the real cost and is credited about three times the actual value, and even then, solar electric systems are only marginally attractive. The total subsidy is approaching 90 percent. We are making a big wager that solar electric panels will become economically viable, a bet that some in the industry are happy to make with other people's money.
As a solar professional, I say we need to be very honest about the cost of the technology and not misuse the public trust.
The installed cost needs to fall by a factor of almost 10 before it will be a viable alternative for homes and businesses already on the grid.
If we reduce the cumulative solar subsidy from the current 90 percent level to a very reasonable 50 percent and the grid-tied segment of the industry can't survive, maybe it shouldn't exist in the first place.
Besides, we have much smarter ways to reduce greenhouse gas emissions, stimulate the economy and reduce our nation's reliance on foreign oil, none of which solar subsidies do to any meaningful degree. A revenue-neutral carbon tax is our least expensive and most effective means to reduce carbon dioxide.