Washington Senate Reexamines Solar Power Incentives

Published February 20, 2014

The Washington Senate Energy, Environment & Telecommunications Committee held a January 30 session to examine federal, state, and local incentives given to the solar power industry. Heartland Institute Senior Fellow James Taylor gave a 45-minute presentation documenting the economic and environmental harms resulting from such incentives.

Taylor observed Washingtonians share common ground recognizing the need for affordable, reliable electricity that meets environmental stewardship goals. Taylor said solar power incentives, however well-intentioned they may be, fail to meet these needs and goals.

Tripling Electricity Costs
Presenting current electricity cost data and U.S. Energy Information Administration (EIA) projections for future electricity costs, Taylor showed every unit of solar-powered electricity delivered to consumers costs several hundred percent more than conventional electricity. Even applying the most optimistic assumptions on behalf of solar power, EIA projects solar power production costs will be more than triple conventional electricity production costs for at least the next several decades.

These price differentials exist despite government subsidies that heavily favor solar power, Taylor noted. EIA reports solar power receives approximately 50 times the amount of subsidies per kilowatt of electricity produced as coal, Taylor documented. 

Washington Faces Unique Challenges
For Washingtonians in particular, the costs of solar power are prohibitive. Taylor presented National Renewable Energy Laboratory data showing Washington holds the least solar power potential of all the lower 48 states. Solar power production in Washington would therefore be even more expensive than the EIA data and projections state, which assume most solar power will be produced in more-southern latitudes and sunnier locations.

Solar Jobs Are Illusory
Taylor noted jobs created in the solar power industry by government subsidies or market share carve-outs are not jobs created at all. Instead, these are merely jobs shifted away from the conventional power sector, where the workers would be producing more-affordable electricity that leaves more money in people’s budgets to purchase goods and services across the entire economy and produce additional jobs there.

Unique Environmental Harms
Finally, Taylor documented many environmental harms unique to solar power. Solar power utilizes more water than coal or natural gas power, requires the development of large swaths of land, relies on photovoltaic panels that require economically destructive production of rare earth materials, and require backup conventional power to operate inefficiently as the systems must frequently ramp up and down to compensate for solar variability.

Taylor Smith ([email protected]) is a policy analyst at The Heartland Institute.