They are required to overpay for that solar power.
In return for overpaying, they get Solar Renewable Energy Certificates (SRECs) which let them pass the extra cost onto local families and taxpayers.
An analysis by a consortium of solar companies and advocacy groups has determined that somewhere in there it means "ratepayers in the region are getting more than a two-to-one return on their investment in solar energy," according to Dennis Wilson, President of the Mid-Atlantic Solar Energy Industries Association (MSEIA), "Although the current SREC prices are unsustainably low, our analysis indicates that SRECs can increase in price, deliver net benefits and still support strong solar growth. Solar power has proven it can deliver value that exceeds its cost by 50% to over 100%. This net positive benefit will only increase as solar technology continues to drop in cost."
That's some government math right there. The lower costs will expire but costs will stay low due to magic rocks. So what if Japanese and American and Chinese businesses have not been able to make current solar power technology viable for the last 50 years? We're Americans, dammit, we will throw another $72 billion at it and it will work or we will keep throwing money at the problem until it does. Global warming is too important to waste time doing basic research to come up with something that will work.
Since they are an advocacy group, all taxpayer subsidies are called "investments". We see these claims once a month - every taxpayer dollar spent on X invariably results in a net return of 1.3X or so. It's amazing we have a deficit at all with so many taxpayer-subsidized projects that are somehow profitable. We should give all our money to these groups and we would have a budget surplus.
What numbers are they so excited about? Their examination of the market claims that solar power is sold for $256 to $318 per MWh (25.6 cents to 31.8 cents per kWh). The 'premium value' - remember that is the rate all those unemployed people have to pay - is 15-20 cents per kW, above the value of the solar electricity generated. The SRECs in New Jersey currently cost about 6 cents per KWh and in Pennsylvania they cost about 2 cents per KWH.
So taxpayers are getting that 2:1 'return' on their tax investment though they are paying for it when they buy the energy. If you smiled at 'jobs saved or gained' numbers and chuckled that "cash for clunkers" was called a success when it cost taxpayers $25,000 per car you will go into an apoplectic fit of laughter at the idea that, because taxpayers only spent 2-6 cents per KWh on the front end and then pay 15-20 cents per KWh at their homes, they are getting double their investment back because they pay one of the energy companies paying the solar companies that happen to be in the MSEIA.
If you are a resident in those states, do you buy electricity from a group called Vote Solar? Hint: You don't. But they are among the ones selling this statistical wobble.
Now, I am a Californian, we have no business at all making fun of anyone else's economics. We just passed a new law to constitutionally mandate money for education so we could use the old constitutionally mandated education money to pay for government union pensions - and we have plenty of poor people in East Compton who subsidized solar installations that went to rich people in places like Malibu.
But Pennsylvania is supposed to be smart. Okay, maybe they are. They haven't bought this hype about increasing their solar 'investment' in the past, they have stuck to overpaying only exactly as much as the law forces them to overpay. The MSEIA wants to change that and their study is the evidence - unless anyone has a calculator.
"For the first time the solar industry can show the quantitative benefits of implementing solar energy technologies specifically in Pennsylvania and New Jersey. For more than three years we have been unsuccessful with enhancing our solar share requirement in Pennsylvania, largely because solar was perceived as only a cost to rate payers. But this study concludes that the value of solar far exceeds the costs to both the rate payer and taxpayer," said Ron Celentano, President of PASEIA and Pennsylvania VP of MSEIA.
New Jersey is America's second-largest solar market with 900 MW of capacity. They generate 1% of their annual electricity from solar power. 52% of their energy comes from nuclear power. The tiniest nuclear reactor in America, at Ft. Calhoun, Nebraska, generates 478 MW, half as much as the entire state of New Jersey's solar industry and with no 'premiums' paid by working people to subsidize the latest feel-good fallacy.
Pennsylvania is much farther behind than Jersey in solar because, since the 1950s, they discovered this thing called science and science shows that natural gas is cheap and clean and therefore we can use more of it without forcing poor people in Newark to overpay.
In a recession, how important is 'merit order effect', where a report 'values' solar higher because, well, solar is awesome. And part of their value metric is claiming that building solar generation plants is cheaper than building natural gas ones, without ever considering the ridiculously better energy density of natural gas. Naturally they also factor in the reduced emissions from solar and 'quantify' that in dollar terms too. But it is all to make the numbers look better and increase their subsidies - sorry, 'solar share requirement'. Solar power jobs are union too, so they get paid more and therefore pay more in taxes so it is even better investment-wise, wink-wink.
I agree solar's potential is awesome. I can't wait for it to get good. But I know that making companies dependent on subsidies does not lower costs, it just sends them out of business when the subsidies run out, like what will happen with wind power in January of 2013, unless their lobbyists get both parties to honor the commitments politicians made when they were lobbying for Iowa votes last month - you can bet Republicans changed their mind about Iowa wind farms once the state voted for President Obama a few days ago.
Solar power is only marginally better than it was 30 years ago. That money they want for more subsidies would be better spent on basic research to find a real breakthrough in cost and efficiency for panels.
So don't be fooled, Pennsylvania. And go Steelers! Jersey, you're on your own.
Full text of their report here.
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