Solar study eclipses sound public policy

Solar study eclipses sound public policy

“Pennsylvania has more than enough sun, space and interest to dramatically increase the amount of energy it gets from solar panels by 2030,” reports the Post-Gazette, citing the findings of a “study group” led by the state Department of Environmental Protection (DEP).

As the P-G dispatch continues:

“But those gains won’t be possible without policy changes that encourage more solar installations, especially large or “grid-scale” projects that have been all but absent in the state so far.”

Of course, among the great unspokens in all this:

“At what cost to Jane and John Q. Taxpayer?”

“With what kind of economic efficiency?”

“With what damage to the energy marketplace?”

The matter is of particular interest to public policy makers in Greater Pittsburgh, given all the talk of late of the “need” for “sustainable” renewable energy efforts, in general, and, more specifically, talk of creating “micro-grid” generating capacity in the City of Pittsburgh.

The goal of this federally funded (to the tune of $550,000), DEP-overseen project is to see 10 percent of the commonwealth’s electricity produced by solar by 2030.

State law – Act 13 of 2004 – mandates that 0.5 percent be solar-produced by 2021. The Keystone state now produces 0.25 percent of its electricity from solar applications.

DEP Secretary Patrick McDonnell told the P-G the plan “demonstrates that we can pursue Pennsylvania’s solar future in a cost-effective manner that complements our position as an energy leader.”

Well, if it’s so predictably “cost-effective,” why is there concomitant talk of tax incentives (public dollars) and “carbon pricing” (government creating an artificial market)?

The newspaper notes that in order to reach the 10 percent solar-generation threshold, “it would take about 124 square miles of land – or less than 0.3 percent of Pennsylvania’s total land area – to increase grid-scale solar to” the needed level.

Allow a little context here: It would take a land mass more than two times the City of Pittsburgh’s 58.35 square miles.

Gee, what could go wrong. Hmmm, government attempting to pick an energy “winner” with taxpayer subsidies and, not detailed herein, the predictable grand-scale economic benefits that, gosh darn, never seem to materialize.

State legislators and DEP officials might take note of what’s been going on off the coast of Virginia for an eye-popping object lesson.

Now, in advance, do note there is an apples-and-oranges quotient to what follows. But the overriding lesson is what happens when governments attempt to command markets.

As The Wall Street Journal notes, a legislative mandate by Old Dominion lawmakers requires the state to produce 5,000 megawatts of solar and wind power by 2028.

Apparently at cost and common sense be damned.

As The Journal notes, Dominion Energy, Virginia’s largest utility, plans to spend $300 million to build two wind turbines 27 miles off the coast of Virginia Beach.

But Virginia’s version of the Pennsylvania PUC – the State Corporation Commission – says the aforementioned “demonstration” project and plans to build hundreds more turbines certainly won’t be cost-effective.

To wit, while onshore wind turbines produce electricity at 9.4 cents per kilowatt hour (the cost is 5.6 cents per kilowatt hour for the same amount of solar energy), the wind turbines will cost – drum roll, please – 78 cents per kilowatt hour.

Again, that’s 78 cents per kilowatt hour.

Other offshore wind farms produce the same amount of electricity for 13.1 cents.

But wait, it gets worse: As a Journal editorial detailed, there was no competitive bidding process for the project and those comparative wind farm project costs were not gathered.

Virginia’s State Corporation Commission concluded that “Customers will pay at least $300 million (plus financing costs) to demonstrate a large-scale project that, based on Dominion’s own studies, will not be a competitive option for the next 25 years.”

So, the project was killed, right?

Nope. Because of the legislative mandate that wind power is “in the public interest,” it will proceed.

Whether it’s Pennsylvania, Allegheny County or Pittsburgh officials considering any kind of “green energy” alternatives, sound public policy demands it be truly market-based and cost-effective. Juicing the playing field with public subsidies is a more than tacit admission that solar cannot stand on its own.

The warped view that government subsidies make such projects “cost-effective” (how Orwellian is that?) must be rejected for the perversion it is. For simply put, if public subsidies are “required,” it’s hardly “cost-effective.”

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).