“The goal is to install solar energy on 1 million buildings statewide by 2017, generating 3,000 megawatts of electricity — the equivalent of six large power plants, or enough to serve 2.3 million people. By comparison, all the solar power installed in all 50 states today has a capacity of about 400 megawatts.” – San Jose Mercury News
But when we calm down the rhetoric, there are a couple of things to consider.
On the surface, the global solar industry is roughly $3.5 Billion/ year, so a c. $3 Billion bill by California looks great. But consider it over the 11 year time program life, and let’s see how it looks. By 2017 at a 20% per year growth rate, around its current historical pace, the industry will be roughly $26 Billion per year, and will have installed $138 Billion worth of solar panels. That makes this PUC program not an enabler of the solar industry, but a 2.5% drop in the bucket. And since we already spend $300 million or so a year in California subsidizing solar, it’s really just confirming more of the same the long-term. Nothing to shout about.
And keep in mind, that $3 Billion dollars is not the whole cost. At $2.80/watt subsidy, the California consumer will still pay 2x that again out of its own pocket to put solar on their roofs. We’re still buying solar panels mind you, which are a 2-3x more expensive source of electricity than we currently use. We are definitely not saving money here for years if ever.
Is the rationale reducing our greenhouse gas emissions? Not a very good argument. We already get a lot of our power from other states, either coal power dirtying their skies, or hydro with very little greenhouse gas impact. And besides, the quickest way to impact our greenhouse gas emissions is to deal with automotive emissions, 3,000 MW of solar 11 years out is barely a ripple in our power emissions over that time. Bottom line, there are better ways to reduce greenhouse gases.
Now, I will accept the argument that we are building a local solar industry. Japan did it very successfully with long-term subsidy programs. But I’m not certain the state should be subsidizing it at this point. American investors have probably sunk on the order of $1 Billion in private capital into solar investments over the past few years and the industry is rapidly increasing capacity, all without the PUC making a move. The solar industry is the biggest bright spot in the cleantech sector. What we are really doing here is providing long term stability for a subsidized market, and guaranteeing that the IPO market for solar stays hot up so the venture capital investors who got in the last few years make a bundle.
But the big issue from my perspective is this: last year the California “million solar roofs bill”, was defeated in the legislature. Partly because California’s finances are in such a messy state that legislators couldn’t agree that we could afford it, partly from partisan infighting. Now by a 3-1 vote, 4 unelected people on the PUC have enacted roughly the same program, at the same cost to the state (and us), by taxing us through our electric bill. And we never had a say. The amount may be small per household ($0.55 to $1.10 per month per household were among the range of estimates I found), but it is very definitely taxation by unelected officials. And I don’t care for that one bit.
Don’t get me wrong, I’m all for solar power, and I think this is a good program and a fair use of dollars long term for the industry and the state, I just don’t like the way it’s been done.
Personally, I’d just as soon let Germany continue to subsidize solar programs and soak up our exports until the price comes down, then after they’ve paid the cost, roll out a massive solar program for a fraction of the cost.