Solar Energy Delivers Too Little Bang For Billions Invested

Forbes David Williams 2/25/2015

Americans deservedly take pride in our ability to tackle and surmount the most daunting technical challenges: the Manhattan Project, the Apollo Program, the Hoover Dam, the interstate highway system. These are among the engineering bold strokes we point to as evidence that anything is possible with the right application of American ingenuity and persistence.

Maybe you noticed that missing from this list is the federal government’s 40-year effort to make “renewable energy” mainstream and market ready. Why? Because when objectively weighed against many other U.S. achievements, this has been a costly and frustrating flop in which massive federal expenditures, over an extended period of time, have resulted in laughably meager results.

The Manhattan project produced the bomb; the Apollo program put men on the moon; the Hoover Dam tamed the Colorado and let a desert bloom; the interstate highway system unleashed America’s mobility. What is there to show for the decades of effort, and trillions of dollars spent, trying to make “renewables” a major part of the nation’s energy portfolio?

Last year, two tirelessly-touted workhorses of the “renewables revolution,” wind and solar, combined generated roughly 2.2% of America’s electricity. Wind accounted for just over 1.6% of that share—and solar just 0.6%. And the tiny share of power they did produce was unreliable, impractical and still not really “cost competitive” if you subtract the direct and indirect subsidies, coming from all levels of government, that keep this teetering house of cards from falling over.

The Government Accountability Office not long ago counted 345 different federal initiatives supporting solar energy. The programs are managed by nearly 20 agencies and support more than 1,500 individual projects. Over the past five years alone, the federal government spent $150 billion on solar energy and other renewable energy projects. Preferable tax treatment given to solar and other alternative electricity initiatives cost Americans nearly $9 billion annually, according to the IRS. Billions of dollars have been blown on solar boondoggles—Solyndra being just one of them—and more boondoggles are in the pipeline (so to speak), since nothing encourages the venture capitalists at the Department of Energy like failure.

But our solar welfare program has gone international now, too. Washington offers the U.S. industry trade protections, in the form of tariffs recently slapped on Chinese solar imports, and President Obama has committing billions of dollars to boosting solar projects in India and Africa.

And that’s just what the federal government offers in support. Personal tax credits related to solar products are available in 20 states; 18 states have corporate tax credits or deduction programs, and 14 states and Puerto Rico offer taxpayer-funded grants to support solar electricity.

Virtually all these programs and giveaways were sold to the public as “temporary” assistance for a technology that would transform the energy sector and soar on its own if given a little help. But a little help almost always turns to a little more help, then a lot of help, for a technology that today delivers very little bang for the billions. Initiatives initially sold on one premise are now being sold on another—that they create (subsidized) jobs and (subsidized) “stimulus” the economy—in a classic example of “mission creep.” Access to such a massive money pot naturally creates a new interest group. The lobbying is always intense to make these “temporary” diversions a permanent drain on the Treasury.

Americans of a certain vintage may recall that most federal alternative energy initiatives aren’t new, but date back to energy crises of the 1970s. They may also recall the bold ambitions and predictions that backers of these efforts made—most of which aren’t close to being realized today. All we’ve really gained for the effort and expense, if you look past the hype, is the creation of a solar energy establishment, made-up of bureaucrats, academics and rent-seeking corporations, whose primary interest isn’t generating power, but pocketing public resources.

After decades of massive “investments” and disappointing results, Americans need to take a critical second look at whether our failed or faltering federal solar initiatives deserve continued support. With so little to show for so many costly initiatives, it should be clear to the objective observer that federal solar power efforts haven’t been a productive or prudent use of precious tax dollars.

Solar energy’s day in the sun may yet come. But taxpayers have done enough. It’s time for Big Sun to stand on its own, powered exclusively by private investment and initiative.