Solar energy critics have been proclaiming that the collapse of solar panel manufacturer Solyndra proves solar power is just a hippie pipe dream. But that’s not the case, as Danny Kennedy points out in Rooftop Revolution: How Solar Power Can Save Our Economy—and Our Planet—from Dirty Energy (Berrett-Koehler Publishers, 2012). In fact, Kennedy gives powerful arguments that solar power can save money, create jobs, and protect the environment—and only politics and perception stand in its way. In the following excerpt, he tackles the (false) claims that subsidies and reliability keep solar energy as only “future technology.” It’s only politics, Kennedy writes, that stands in the way of it becoming “today technology.”
Some of the cleverer solar energy critics are framing solar energy as a “future technology.” You may have seen ads about fossil-fuel companies “investing in solar for tomorrow,” or the future of solar power, to make themselves out as good guys, concerned about the environment but unable to yet use solar power. This was a lot of the content of the “Beyond Petroleum” BP marketing campaign, even though it spent a factor of 10 times as much on new oil and gas development than on solar in the decade it ran the ads. And in 2011 it shuttered solar operations altogether.
In other words many fossil-fuel interests are peddling the message that they care, but in truth they’re procrastinating. This “not yet” message cracks me up because they know as well as I do that space travel and satellite technology are all solar powered and have been pretty much since we first went into space. Solar is not a future technology but a technology that’s ready for us now—the people here on Earth who are concerned about bills and our energy future.
Ah, subsidies: King CONG’s favorite fight. And why? Because CONG—better known as the coal, oil, nuclear, and natural gas industries—wants you to believe renewable energy is being overly subsidized. Yet all energy is subsidized, especially the fossil-fuel industry. It is currently estimated that here in the United States oil companies are receiving $7,610 per minute in tax breaks—that’s $4 billion per year. And fossil-fuel subsidies are perverse, while renewable-energy subsidies are broadly working. It’s true that there can be problems when politicians pick favorites, like Solyndra, but the most egregious problems are the now-permanent and accepted subsidies provided to the fossil-fuel industry.
The US government’s $50 billion-plus-per-year outlay for conventional energy sources distorts the US energy sector by subsidizing mature companies whose business models and core technologies work well, are insanely profitable, and in many ways dominate markets that are neither highly volatile nor even competitive. The other way our government supports them is to continue to turn a blind eye to their externalities, or true costs—whether that’s maintaining a military presence in the Middle East (to secure our access to oil) or tolerating the intense impact of conventional energy on human health and ecosystems. We have already mentioned the threat to humans in terms of air quality effects and climate change, but conventional energy also degrades our environment, which has an immediate economic cost in terms of diminished resources (such as water). All of these costs should be added in when we tally up the corporate welfare we give these companies.
You can quibble over numbers, but fossil-fuel subsidies far outweigh those for renewable energy. The Environmental Law Institute reckons that the US government gave more than $70 billion worth of subsidies to fossil-fuel companies between 2002 and 2008. In that time about $2 billion went to the solar industry. U.S. Congressman Earl Blumenauer calculates that the government is committed to spending more than $40 billion to subsidize the fossil-fuel industry from 2011 to 2015, while no more than $10 billion is scheduled to flow into renewable-energy businesses.
The federal government has a long history of investing public dollars in energy via tax credits, subsidies, and other incentives. The agency that tracks such things, the US Energy Information Administration, found that in 2007 subsidies to nuclear were 9.6 times higher than those for solar; natural gas and petroleum subsidies were 11.2 times higher; and coal subsidies were 22.2 times higher. Some people think that this has changed a lot recently due to “Obama-era stimulus spending,” but the American Recovery and Reinvestment Act made only small advances toward equal treatment of the technology. Even in 2010 coal subsidies were still 20 percent higher, nuclear subsidies were 120 percent higher, and natural gas and petroleum were 148 percent higher than solar subsides. More importantly, 93 percent of the fossil-fuel and nuclear subsidies were permanent, whereas almost 70 percent of the solar subsidies were temporary stimulus-bill subsidies, which reduce the certainty that the clean-energy industry needs to attract investors.
A better way to think about these subsidies is in an apples-to-apples comparison of the early phase of each technology’s adoption. Just the first 15 years of investment in each energy sector reveals tremendous discrepancies: $1.8 billion per year (in inflation-adjusted dollars) was spent on subsidies for oil and gas industries in their early days compared with just $400 million for all renewables, including wind and solar. And today, a hundred years later, tens of billions are still spent supporting oil companies each year, even though they’ve clearly established their businesses.
The problem is that, over time, fossil-fuel subsidies have been increasing per unit of energy or jobs created rather than declining as the industry matures. Remember that solar energy creates between three and seven times as many jobs as fossil fuels. As mentioned, many of the fossil-fuel subsidies have also become permanent, such as the tax credits granted to American gas- and oil-drilling industries, which use the money to finance their wildcat and fracking forays; this reduces their innovation drive.
And all the while, the companies behind these efforts have been increasingly profitable: ExxonMobil was the most profitable corporation in history for much of the 2000s. So it’s receiving government money while making exorbitant profit. And since the mid-2000s it’s been shedding jobs; indeed, Big Oil downsized its workforce by more than 10,000 in the second half of this century’s first decade. In 2010 alone the top five oil companies reduced their global workforce by a combined 4,400 employees while making a combined $73 billion in profits—this includes BP, which that year had the infamous spill in the Gulf of Mexico. The coal industry is similarly retrenching its workforce, with the greatest losses soon to come in the Appalachians. So don’t be fooled: King CONG is a part of the problem, destroying American jobs while making gobs of money and disproportionate billions in subsidies.
Renewable-energy subsidies, while smaller, have been declining per unit over time relative to the amount of power they produce. For example, in California, the major market for the Rooftop Revolution so far in the States, rebates have fallen from more than $2 per watt of solar power installed to less than $0.50 in most utility territories. So for the solar industry, we can say that government support programs have been doing their job in terms of creating an incentive for the industry to mature, increasing competition, and decreasing prices. Indeed just in the past couple of years, as the price of oil soared to more than $100 per barrel, prices for the solar consumer have fallen by more than 50 percent.
At the same time, solar businesses have boomed, and we’ve created jobs almost 10 times faster than the national average. Between August 2010 and August 2011, the number of people employed in the US solar industry grew 6.7 percent, to more than 100,000, which is more workers than are employed in the coal-mining industry. We explore the jobs benefits of the Rooftop Revolution in greater detail in chapter 5, but for now note the difference with the fossil-fuel industry; that is, that solar has had a diminishing subsidy over time while its prices have dropped and its employment has grown.
At the end of the day, it’s dubious that renewable-market support payments should even be compared with the corporate welfare that fossil fuels have received. As the IEA writes,
Only a small proportion should be considered subsidies or, rather, learning investments required to bring solar technologies to competitiveness. Their success would provide broad access to an inexhaustible source of energy and help give more than a billion people around the world greater opportunity and economic freedom. By contrast, fossil-fuel subsidies only serve to perpetuate a system that is ultimately not sustainable and distributes energy production and its benefits by chance.
“Unreliable” is a claim made by dinosaur technology when challenged by a superior new competitor. “Don’t get a cell phone,” the telephony industry once said, “because you may not be able to use it to call 9-1-1. Keep a landline just in case, for when you really must have an incoming phone number for your business because that cell phone toy is really not adequate to ensure service.” Sure, you couldn’t compare the reliability of the cell phone then to what it is now, but the benefits “that toy” provided were still life-changing. And now there are more cell phones than land lines in the world, and they work just great. Perhaps the killer factoid is that there are 500 million people who don’t have electricity but do have cell phones, mostly in Africa. Cell phones have overtaken land-line use in less than a decade and are way better at providing the service of telecommunications to more people at less cost than the incumbent technology. Watch out for solar!
Actually, in one of those great “the truth is not what you expected at all” realities, solar-panel penetration into the grid improves reliability. This has been well modeled in New York State, where energy regulators worked out that 5,000 megawatts of solar panels spread around the state would relieve some of the stress on the grid during times of peak demand—for example, in midsummer when air-conditioners are turned up full throttle and the state’s requirement can approach 34,000 megawatts, causing frequent brownouts. Lots of solar-power sources scattered around the grid could relieve local demand and reduce bottlenecks that occur when power can’t move across long distances on the grid quickly enough. When you think about it as a portfolio approach to maintaining uptime or service, it makes sense that this works better than a system limited to a few large plants—it’s a bit like cloud versus mainframe computing.
Reliability issues will be resolved; just as AT&T puts up more cell towers, there are ways we can evolve the grid to accept solar power. There are technical issues around plugging in to solar because, of course, the sun doesn’t shine half the time, but we can make up for that by using energy storage systems, batteries, and other clean-energy generators. This is not easy stuff, but it’s not beyond us. Ours is the country that created the Internet—with bidirectional, multiple input information flows cleverly organized to deliver an answer to your every question in mere seconds. We got this electricity thing!
One of the key changes in relation to reliability is the principle of “flexible and inflexible generation” and how this might replace the concept of base-load energy. For now, when we’re at a tiny percentage of supply, the grid itself serves as the battery for solar power. When the sun goes down, a flexible generating resource can be turned on by the utility to match the load while the solar electricity in the system declines. Electric vehicles, for example, could have the power in their batteries drawn down while parked to meet load in the early evening. This can be technically managed now with up to 50 percent solar-panel penetration, which cannot happen for years to come in most places. After that the plan would be for solar to work with wind and demand-side management techniques — turning off loads when the demand is high—to keep the grid stable. And aside from that, if you had to, you could use a fast-ramping gas power plant to fill in any need not met by the renewable inputs.
In other words, you can have an intelligence layer that manages the various inputs and keeps the lights on, just like data centers juggle the processing power of thousands of computer servers to maintain uptime for websites and Internet service. A new range of technologies built around solar plants that store heat for after the sun goes down will add to the dynamic stability of this sunshine mesh. These colossal batteries or energy storage systems are the equivalent to the new cell towers AT&T had to put in to deal with demand and congestion in its network.
David Mills, founder of the solar-plus-storage company Ausra, has shown that by using storage you can easily correlate more than 90 percent hourly grid load and hourly solar plant performance. In other words, direct solar-thermal electricity solutions that are almost market ready can supply most of the United States’ electricity needs. I bet that’s why Areva—the French nuclear giant—bought Ausra (now called Areva Solar)! The IEA says that solar power with storage is expected to be available to deliver competitive electricity globally by about 2030. This means that the distinction between peak power times and baseline power usage would become less relevant, as stored solar electricity could at all times complement the fixed solar supply each day.
In summary, reliability is really a technical issue related to the grid and to scale, not something innate in solar panels. And this is going to be our challenge. The solar-panel technology works fine; day in and day out, it produces 15 percent efficient electricity from the solar power falling on it, and it’s ready now. What matters is how this technology is distributed to users and how power is stored for those periods when the sun is not shining. We will have to rewire America to make this work, and energy-providing utilities will have to change their stripes—and therein lies the opportunity. While this isn’t easy stuff—making a thousand points of light work together to keep the lights on—America’s best have never before shrugged off something just because it was difficult. On the contrary, we embrace challenges and have been leaders in such revolutionary achievements as organizing the world’s information, beating back fascists, and conquering outer space.
This is why we need the upcoming corps of entrepreneurs to be our century’s New Greatest Generation. Just as electrification was the standout achievement of the twentieth century, according to Time magazine, green electricity will be a significant achievement in the twenty-first century. The Rural Electrification Administration, which took America from having just 15 percent of homes being electrified in 1935 to 85 percent by 1950, is a model for how we can do it. Low-cost loan support backed by the U.S. government spread electricity across the country (thanks, President Roosevelt!). And therein lies not just the opportunity but also the way that solar energy will become more and more affordable: scale and standardization through deployment supported by positive energy policies like the Renewable Portfolio Standard and net energy metering.
Excerpted from Rooftop Revolution: How Solar Power Can Save Our Economy—and Our Planet—from Dirty Energy, published by Berrett-Koehler Publishers and © Danny Kennedy, 2012.