Smoke Filled Rooms, Solar Power, and the Long Shadow of Grid Parity

Michael Giberson

An rambling complaint surfaced at (slogan: people, planet, profit.) linking a “number of articles questioning the economic viability of solar power [which] recently hit the streets” to “a new, well-oiled regime coming to power in Washington.” We could stop right here to consider that articles questioning the economic viability of solar power pretty much stretch back to the pre-historical era, or at least since solar power has been seriously contemplated as a resource. Such articles have continued to “hit the streets” at a pretty regular pace ever since. (The exceptions are places the grid doesn’t reach and various small market niches.)

But making the TriplePundit complaint funnier was the first article cited was Marc Gunther’s “The Hidden Cost of Solar Power,” which “hit the streets” a week before the new House majority was elected.  It is hard to imagine Gunther as some sort of anti-solar shill working for well-oiled Republicans.  Much easier to imagine is that Gunther is just collecting data points and assembling them into a story that reflects his view of the data.

Making the TriplePundit complaint still funnier was this bit of math on subsidies for energy resources: “Then there is the oft-mentioned complaint about subsidies. According to the Dept of Energy, in the year 2007, fossil fuels received 66% of all source-specific subsidies, while all renewables received 59% (nuclear received the rest).”  The rest of what?

The complaint also misuses the economies of scale argument to argue for subsidies to boost solar power production (“It’s a well-known fact that as industries mature, they drive costs down in any number of ways.”) Probably most industries do drive down costs as they mature – industries that don’t control costs end up not surviving to maturity.  But there is nothing automatic about economies of scale; subsidizing an industry so it can grow big does not necessarily inspire it to reduce costs.

Perhaps the tentacles of the well-oiled regime coming to power in Washington extend around the globe, because here is another recent article questioning the economic viability of solar power, this one from London, “Solar mania will cast a shadow over Britain“:

One of the things for which Britain is justly famous is its lush, green, spectacularly beautiful countryside. One of the things for which Britain is not at all famous is its endless sunshine. Put these two basic facts together and you might reach one obvious conclusion: that any taxpayer-funded scheme to carpet that unspoilt landscape in solar panels in order to generate electricity at nearly three times the market cost is bound to end in disaster.

You know this. I know this. Maybe one of us should have a word with Chris Huhne.

In a scheme so bizarre and suicidally destructive you’d think it could only be the work of a devilish Britainophobic double-agent, our Secretary of State for Energy and Climate Change is planning to bribe farmers with billions of pounds of our money to turn their land into solar electricity plants.

Separately, the Arizona Star reports that the elusive grid-parity point is coming closer for solar.  Though the analysis on this point is weak, the story provides a good explanation of developments in Arizona’s solar power market.  The article said subsidized payback periods for homeowners can be about 10 years, but unsubsidized (i.e. considering the ratepayer and taxpayer contributions) that number is closer to 30 years.