President Obama visited a Walmart in Silicon Valley on Friday, where he announced that several hundred companies have committed to ramp up their use of solar power. That includes Wal-Mart, which promises to double onsite solar energy projects at its nearly 5,000 stores by 2020.
Altogether, the “solar commitments” by Wal-Mart Stores and the other 300 or so companies represent more than 850 megawatts that will be deployed, according to Dan Utech, Mr. Obama’s special assistant for energy and climate change. That’s nearly enough megawatts to power 130,000 homes.
The White House boasts that “the U.S. solar market has experienced rapid growth since President Obama took office,” not the least because “the price of solar technologies has decreased.”
Indeed, the U.S. solar industry had a boffo year in 2013, growing an impressive 41 percent over 2012, according to the Solar Energy Industries Association. And nowhere was solar more in demand than in California, which accounted for more than half the solar equipment installed in the country.
Of course, the rapid growth in solar would not have been achieved without government impetus.
That includes the roughly $1 billion a year in federal subsidies the solar industry receives. It also includes the renewable portfolio standards imposed by most states, like California’s mandate that one-third of the state’s electricity come from solar or other renewable sources.
It’s not that solar power doesn’t have promise. It’s that the renewable energy source is still many years away from being able to compete with coal and natural gas on a level playing field.
Consider the growth of rooftop solar power. It has been made possible by so-called “net energy metering,” which allows solar-equipped businesses and residences to be free riders on the state’s electrical grid.
That’s because NEM keeps track of the amount of electricity a solar customer receives from the grid (when their rooftop arrays are not generating power) and how much surplus electricity their solar systems generate and send to the grid.
The solar customers get paid retail (rather than wholesale) rates for the surplus electricity. That is used to offset the cost of electricity they must get from the grid.
The problem is that, while solar customers get electricity transmitted to their homes or businesses over the grid, in California, they can receive an annual payment from the state’s utilities, while paying nothing to maintain the grid.
That cost is borne by the rest of the customers of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric. Without their involuntary subsidy of solar customers, roof-top solar would be a cost-prohibitive bust.
That’s why solar-power experts don’t share President Obama’s bullishness on solar power.
“Solar is intermittent, peak-loaded power,” Gordon Johnson, managing partner for Axiom Capital Management, told Barron’s, “meaning you don’t get power when there’s cloud cover or the sun goes down. It can’t replace fossil fuel or nuclear base-load power, which is the same level, day or night.”
Real world money managers, like Mr. Johnson, are not about to bet their clients’ money on solar power, no matter that Wal-Mart and other companies have made “solar commitments.”
They leave it to Washington, and to Sacramento and other state governments, to risk billions of the taxpayers’ dollars on solar.
— Copley News Service
