When the solar manufacturer Solyndra went bankrupt, the critics had a field day with the Obama administration because of its $500 million loan guarantee to the company. It wasn't just evidence of favoritism and corruption that the likes of Republican Rep. Darrell Issa went after. It was the whole idea of subsidies to clean-and-green energy in and of themselves. Much of the criticism was hoary ideological claptrap: the government shouldn't be picking winners and losers; there ought to be a level playing field among all energy sources; solar can never supply more than a teensy fraction of our energy needs; the renewables industry has gotten subsidies no other industry received. Ad nauseam.
Thirty-two years ago, when I still worked at the Solar Law Reporter, a publication of the Solar Energy Research Institute, a division of the newly minted Department of Energy, it was pretty much the same line of claptrap. On the technological side, solar, it was said, and wind-generated electricity and geothermal power and the other renewables, amounted to an ultra-expensive scam that would never be able to supply more than a minuscule fraction of the electricity needed to power the country.
Subsidies and, say, spending federal money for people like us to provide source material for laws friendly to solar (and wind, etc.) were a rip-off of the taxpayers it was said. Didn't matter whether these were as big as requiring utilities to buy power from renewable sources or as mundane as writing model laws for municipalities to govern whether a neighbor can plant trees that block a residence's solar panels. All nonsense said the naysayers. The engineering, it was claimed, would never be able to achieve what other sources could achieve. A happy fantasy at best. Just another Treasury drainer at worst, money that should go not to DOE but DOD.
But as long as Jimmy Carter was in office, the money flowed in our direction. The chief rationale behind this was one we still hear talked about: energy independence, or as it was more commonly known then, oil independence. The first and then the second oil shock, the Iranian revolution against the U.S. puppet-shah, the Soviet move into Afghanistan, the partial-meltdown at Three Mile Island all made freeing the U.S. from Middle Eastern petroleum imports a popular slogan.
To be sure, there was an environmental aspect involved. Some of us at SERI, at least on the non-technical end, were there because we believed, with Barry Commoner'the left-wing, eco-socialist plant physiologist who would make a symbolic dash for the presidency on the Citizens Party ticket that year'that ecology and economy are inseparable. Our view was that externalities like lung disease acquired from gulping down air laden with coal dust ought somehow be tallied in the market costs of the product instead of subsidized by wreckage to people's pulmonary systems. We sought a way around mining's destruction of habitat and tainting of water. And sulfured rain.
Years would pass before "global warming" entered very far even into the scientific community, much less the popular consciousness of even ardent environmentalists. Our approach was unrelated to that. Rather we sought sustainable energy. Disconnected from dangerous sources that must be subsidized with vast sums of military money and occasional blood-baths. Not causing serious environmental, health and safety risks. Renewable energy. Commoner's view, our view, "our" including our boss, Denis Hayes' view, was a minority within a minority. Our SERI colleagues wanted reliable power from solar and wind and other renewable sources for "independence" reasons alone. Pollution? Safety? Imperialism? Please, don't talk politics was the view. Or, occasionally, what are you a commie?
We got bizarre requests for studies that we hoped would never see the light of day. One of those on which our hope came true was the MX missile. This was going to be 200 and then they decided on 100 mobile ICBMS that would be driven around under cover and temporarily parked at random, scattered across the desert among thousands of covered launching pads. Meanwhile, decoys would pretend to park the MXes at other sites. And they would keep up this moving around constantly. This, it had been decided, would make it obvious to the Soviets that they could not be certain of taking out our land-based missiles. They called it the race-track. Move the missiles around fast enough that the Soviets cannot figure out where they are. Thus: deterrence.
Buy that theory if you want. The trouble was, these launching pads could not be connected to the vulnerable-to-attack electrical grid. So our role was to find the means of providing enough solar photovoltaic power to independently electrify thousands of pads. We peaceniks thought the idea of the MX was coo-coo. But we saw a benefit. This project would mean huge amounts of solar cells would need to be manufactured. And making that many would make them cheaper and, as wars and cold wars do, boost technological change much quicker than the barely existing solar industry at the time. We were, as you might imagine, conflicted.
Then Ronald Reagan arrived at 1600 Pennsylvania.
You might think he or his advisers would have liked that MX missile deal. But he and they were more interested in dismantling the fragile infrastructure of renewables. Which is what he proceeded to do. It was made easier because the price of oil, which had soared higher than ever, plunged. A tax credit for installing renewables soon expired. The efficiency standards for automobiles were frozen at their designated high point in 1987. SERI wasn't utterly destroyed but morphed into a lower-funded National Renewables Energy Lab. Nor was its budget eliminated, although there were plenty in Washington then and since, who wanted to do away with it and the rest of the DOE. But the gleam was off.
Progress was made, but it was slow and legal, technological and financial obstacles stood in the way of a break-out. So Big Energy and its surrogates could point to the data and say: Look, we told you so. Solar (and wind, etc.) will never amount to anything. Look how small their market share is. And besides what do people do when the sun isn't shining or the wind isn't blowing? Don't waste your money on them.
All the while, of course, these mature industries continued to suck up their own tax and other benefits, subsidies in the form of loan guarantees, and intangible drilling costs, and avoidance of health-care costs caused by burning hydrocarbons, ecological costs, and military costs to protect "access."
This kept the renewables industry in a box. But in the past few years, it's been bursting forth everywhere. In every case, there are subsidies involved. These have boosted the number of solar panels made and installed, lowered their costs and spurred additional innovation. Wind turbines are now amazing machines, a handful capable of supplying prodigious amounts of electricity at lower and lower inflation-adjusted costs.
Still, we hear that there is something wrong with these subsidies. Something almost...well...unAmerican. In fact, subsidizing energy is an American tradition.
A newly released study should put the kibosh to this anti-subsidy talk. It won't, of course, because the moneyed interests behind the fossil-fuel industry and its politician-puppets will continue trumpeting their malignant nonsense about solar (and the other renewables) being too expensive, too unreliable and too much of a fantasy of tree-hugging hippies who just don't understand how energy works.
The study 'Assessment of Incentives and Employment Impacts of Solar Industry Deployment,' commissioned by the Solar Energy Industry Association and carried out by the non-partisan Howard H. Baker Jr. Center for Public Policy concluded that "solar is on the path to becoming a mainstream source of energy for our nation,' says Baker Center Director Matt Murray.
A key finding: Government has provided subsidies and implemented legislation and regulation for all major sources of energy paving their way to gaining significant market share. The typical incubation period before an energy source gains 1 percent of market share is 30 years.
I'm not going to analyze the study here. Everyone should read it for themselves. As you do, take note that the idea solar and wind and other renewable sources can't provide a reasonable fraction of electricity via the grid and via systems like solar rooftop installations is being disproved right now. Wind supplies 19 percent of Iowa's electricity. That's the leader, but a dozen states have the same capability given the right policies. And some of them have established good energy policy, with required percentages of power to be generated by a certain deadline. Solar is only a blip in the statistics, it's true. But the amount of new solar installed last year nearly doubled the existing total.
Take away the subsidy now, the production tax credit in the form of a 2.2 cents per kilowatt-hour for the first 10 years of generation of utility-scale wind, solar and geothermal electricity producers, and the market for making the switch will dry up because these take huge investments. And utility investors want to be at least somewhat certain of their return.
The PTC expires at the end 2012. And already investors are shying away from projects. Because they don't know if it will be renewed before it expires or not. The usual suspects in Congress don't want them renewed.
These subsidies aren't required forever. They are meant to get the industries up and running and gaining enough market share to drive further innovation and lower costs. It just takes time. Like it did with other energy industries. The ones that still get subsidies of various sorts. While howling about the new kid on the block. The ecologically crucial new kid.
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