Solar without Subsidies?
Is that possible?
Last Fall, when Solyndra collapsed, it left many Democrats and the White House red-faced. And regardless of what investigations of the solar company ultimately find, the company failure was red meat for Republicans. Never mind the arguments made by Democrats that the loan guarantee program that had been so lucrative for the solar company was designed to help risky ventures, or that Solyndra's $535 million guarantee was just a small fraction of the total program. It just looked bad, and politically speaking, that's more than enough.
As enthusiastically as the Democrats hailed the company as a symbol of solar's success at creating jobs and innovative product in the market during good times, the Republicans are railing against solar in bad times.
Solyndra is now a dirty word on Capitol Hill.
"Solyndra's failure is evidence of the folly of subsidizing green energy combined with the folly of politicians' handpicking winners and losers in the market," declares a report written by the House Committee on Oversight and Government Reform, typifying Republican commentary on the company.
So now, whatever the merits of the specific accusations about Solyndra may be, the company's bad name is being used to smear all of solar.
"This is not the time to be in the headlines," one green energy lobbyist said, complaining about just how hard it has become to make the case for solar on Capitol Hill. It's not the time, because key government incentives for solar are expiring, and the American manufacturing industry is in the early stages of a trade war with Chinese manufacturers. Strong support from politicians would be important on these issues in any atmosphere, but especially so in these bitter, partisan days.
So how can the solar industry get help this time, without a bottomless reserve of money built up from decades of successful business? Everyone already knows fossil fuels get a lot of subsidies. But, be realistic about where the solar industry currently is, and get focused on life after subsidies and how to get there as quickly as possible, several people said.
High Expectations
In the past, the green world -- not just energy -- has been guilty of setting very high expectations and then letting the politicians who support them run wild. President Barack Obama's promise of 5 million new green jobs, which sounded so uplifting at the time, something that could really motivate voters, is now one of the phrases that Republicans turn back on their Democratic opponents. Solyndra was arguably a case of setting expectations too high -- it was heralded as a success even before anyone knew if it could be, and when the chance of failure that everyone tuned in to the industry and the government loan program knew was possible, happened, it stung badly.
There is an opportunity in the post-Solyndra era, Tom Kimbis, the Solar Energy Industry Association's vice president of strategy and external affairs, said.
"We have to make sure we don't throw the baby out with the bathwater. Just because we have one or even a handful of companies fail isn't indicative of the overall industry," Kimbis said. "Nor would it be fair to look at the industry through the lens of one particularly successful company. It's a diverse and competitive industry."
Discussing the possibility of incentives drying up or federal policy turning against solar, Kimbis readily acknowledged how tough it might be but emphasized that the most successful industries had hard times before they became some of the most profitable. And his public message focused on life after government subsidies.
"I see solar today as going through something very similar to what the telecom industry or what the personal computer went through," he said. "We're in a transformative phase."
Jesse Jenkins, director of energy policy at the Breakthrough Institute, a think tank that focuses on pushing innovation and new technology to solve major energy and climate problems, believes the time is right to reset the message on solar. Kill the idea that solar is an industry perpetually in need of support, he said.
"I think what the industry has to do is really get clear in the messaging to policymakers that they're not asking for open-ended, unending subsidies," he said. "They need to say, `Here's a road map; we're going to execute, a real, credible plan. We need help to get us through this road map, and here's the policy to get there.'"
This story first appeared in the January /February edition of EnergyBiz
Comments
solar without subsidies
Commentators who are not willing to reveal their name should not be allowed to crticize articles for not substantiating their statements with evidence while doing the same thing themselves. It is entirely fair to argue that he PTC is a subsidy. However, the claim that all of the tax benefits available to fossil fuels are also available to renewable energy industries is easily refuted. Many tax benefits, such as accelerated depreciation etc. are common to both industries, but only fossil fuel industries benefit from the depletion allowance, which allows a deduction from gross income of up to 27%, because renewable fuels are not depletable. Similar discussions on the web site in the past have argued over the definition of subsidy, such as the inclusion of unmonetized externalities attributable to health and environmental costs, increased military spending, and contributions to global climate change. I am willing to concede the semantic difference. However that does not change the fat that fossil fuel industries have benefited mightily by not having to pay for the societal health costs, environmental destruction, higher military spending, and future climate change for which they are directly responsible.
Joe Schiller
solar without subsidies
Commentators who are not willing to reveal their name should not be allowed to crticize articles for not substantiating their statements with evidence while doing the same thing themselves. It is entirely fair to argue that he PTC is a subsidy. However, the claim that all of the tax benefits available to fossil fuels are also available to renewable energy industries is easily refuted. Many tax benefits, such as accelerated depreciation etc. are common to both industries, but only fossil fuel industries benefit from the depletion allowance, which allows a deduction from gross income of up to 27%, because renewable fuels are not depletable. Similar discussions on the web site in the past have argued over the definition of subsidy, such as the inclusion of unmonetized externalities attributable to health and environmental costs, increased military spending, and contributions to global climate change. I am willing to concede the semantic difference. However that does not change the fat that fossil fuel industries have benefited mightily by not having to pay for the societal health costs, environmental destruction, higher military spending, and future climate change for which they are directly responsible.
Cost-effective solar applications
Cost-effective solar applications
Some companies need to fail.
Solyndra was one of them. When we let politicians obviate the impacts of the market, taxpayers are the ultimate losers. The money is gone. And the debt is the worse for it. Of course, we could always Occupy Solyndra and demand the 1% pay for it to startup again, since its just gotta make money...after all its green.
"Kill the idea that solar is an industry perpetually in need of support", he (Jesse Jenkins) said. Since when has it NOT been in need of support? Thus far, perpetual support seems to be exactly the case, so killing that idea seems rather like killing the truth up to now and the foreseeable future.
How about some facts to support the subsidies for fossil claim?
"Everyone already knows fossil fuels get a lot of subsidies." How about some facts to back that up?
I have looked over a number of websites that claim fossil fuels are getting enormous subsidies but I keep finding tax deductions rather than subsidies--aka PTCs and cash grants--for fossil fuel production. A couple of sites even have the gall to fault fossil energy production for getting PTCs for ethanol which is a (supposedly) "green" program. The biggest item the complainers about fossil subsidies target is the foreign tax credit--but any company in the world can get the same credit including wind and solar businesses.
By the way, many of the "oh-so-bad", filthy oil and gas companies are investing heavily in wind and solar to get--wait for it--PTCs. This means the rest of the country gets screwed because their taxes are used to reduce the tax bills of oil-and-gas companies, generating companies, big producers and developers of wind and solar projects (GE, Siemens, Duke Energy, etc.) and the rich Wall Street investment houses that back the green projects to get the PTCs to reduce their tax bills. And for what? Studies out of the UK and the Netherlands (Civitas & C. le Pair) indicate the heavy investment in wind and solar has not resulted in any decrease in CO2 emissions there due to the intemittancy, variability, and lack of dispatchability of those technologies.
In short, the PTC and cash grant programs are a reverse Robin Hood--taking money from individual and small business income taxes to reduce the tax bills of large corporations and investment firms and with zero, or maybe even negative, results on CO2 emissions--especially when one factors in the shift of manufacturing to China, India and other developing countries who are busy building coal fired plants with little or nothing in the way of emissions controls. Not only are they pumping more CO2 into the air, they are also pumping SOx, NOx, particulate matter, and other toxic pollutants that are not allowed in the US and Europe. Another monetary cost of wind and industrial scale solar that everyone else gets stuck for is the cost of building long distance transmission lines from remote facilities that generally carry only a fraction of the power for which they are built. Those costs go into the rate base and add to the power bills of individuals and businesses.