In this sluggish economy, you would think that selling expensive electricity to businesses or homeowners would not be a good business. But the solar-power industry is doing exactly that. Solar power is more expensive that making electricity from natural gas, coal, wind or existing nuclear plants, and yet the business is booming. [See: U.S. solar power: doubling in 2010!]
Hardly a day goes by without good news for the solar industry. For example:
BrightSource Energy, Inc. just announced that power generation company NRG Energy will invest up to $300 million to become the biggest owner of the Ivanpah Solar Electric Generating System, the largest solar thermal system in the world, just beginning construction in California's Mojave Desert. Gov. Schwarzenegger and Interior Secretary Ken Salazar joined in a groundbreaking today. That's a mock-up of the Ivanpah plant pictured at right.
And:
SunRun, a California-based home solar company, said this week it received an additional commitment of tax equity from an affiliate of U.S. Bancorp to develop 1,900 residential solar installations. Given that the typical installation costs about $35,000, that's roughly a $65 million investment. SunRun has now raised more than $300 million in project financing.
Recently, I visited a solar PV manufacturer, Solyndra, at its headquarters in Fremont, CA. While Solyndra is worried about competition from low-cost manufacturers in China, it is still selling all of the photovoltaic panels it manufacturers. Recently:
It announced deals to install its cylindrical solar panels on the roof of a Frito-Lay manufacturing plant and on rooftops in the Los Angeles area that will supply 16.2 MW of power to Southern California Edison.
None of this comes cheap, although calculating the cost of solar power is not simple–it depends on the kind of system in place, its location and the costs of financing, since "fuel" from the sun is free. Solarbuzz, a respected source, says that:
Solar Electricity Prices are today, around 30 cents/kWh, which is 2-5 times average Residential electricity tariffs.
According to the Energy Information Administration, the average residential price for electricity in June was 12 cents/kWh, the average commercial retail price was 10.70 cents/kWh and the average industrial retail price was 7.31 cents/kWh.
So why do the economics of solar power work for the industry? The answer, you won't be surprised to learn, is generous government subsidies.
Take that Ivanpah solar-thermal plant. It's big: 392MW, enough to power 140,000 homes. "That's greater than all of the solar in the U.S. that was constructed last year," said Brightsource CEO John Woolard, on a call with reporters today.
Solar Power now must be
Solar Power now must be encourage to help ease the worsening climate change due to global warming. Solar Power can make a difference in our lives. Aside from we can save money we are also helping eradicate harmful gas emissions.
no, it does not, as the Yes.
no, it does not, as the
Yes. Not many i hear preaching free market is serious. Let subsidize sustainable energy (Energy that is based on Sun, Wind and is Renewable but created in a non-toxic, infinitely recyclable form, like natures power collector.) Then after mitigating the economic damage done by fossil fuel subsidization, drop all subsidies and let the market say which form of energy is better!
So explain to me the logic of
So explain to me the logic of subsidizing a company that has a 30 billion dollar quarterly earnings. Exactly how does that help our energy problem? This country has always subsidized new innovation - the railroads were given billions of dollars worth of land in right of ways. The transportation industry is supported with an Interstate highway system (their taxes pay for only a fraction of the damage they do to the system) and the original cost of the system was paid for by our taxes. The entire support system for the airlines is paid for by the tax payer.
Government support of industry is not something some "lefty" just dreamed up in a fever dream.
Read some history.
what sean said. there should
what sean said. there should be more stink about subsidies in the media. its outrageous how insanely profitable oil companies are, given sooo much more money and allowed to get away with not paying taxes. they are also old technologies that have not improved very much. these new renewable companies need help. its a new a flourishing industry that is employing many people globally. the only problem is its not happening fast enough thanks to those mothers in OPEC
Hi Agreed that solar is on a
Hi
Agreed that solar is on a hockey stick trajectory. The debate about subsidies is a real one and hard to extinguish, as there are subsidies across the board for energy.
The subsidies will spawn innovation and in doing so, seed the industry with efficiencies and economies of scale.
Speaking of, how else can we minimize subsidies?
Offering other services, like energy efficiency to lower the cost for renewables, as an example.
One of the main deficiencies I see in the country, is a lack of productivity and profitability within the solar community. There is an answer for this: www.solarbusinessblueprint.com/gotprofits
By having your numbers dialed in from the start, you mitigate alot of the business woes many companies experience today.
What do you think?
the next time I read an
the next time I read an article like this, i desperately want to see a balanced discussion of the massive subsidization of the fossil fuel industry in this county so it can be a more informed and meaningful discussion.
stuff like
- fossil fuel subsidies of $72 billion from 2002-2008 (renewables got $12 B over same period)
- oil company use of “percentage depletion” system tax deduction for declining well
- $0.05-$0.10 per KWH subsidies for nukes
- $17 Billion for the the lobbyist driven corn ethanol boondoogle
only then can articles like this be taken seriously and in context or a larger, and totally mismanaged and politically driven energy system.
We get more for our money by
We get more for our money by subsidizing fossil because the vast majority of our power is generated by fossil fuels.
But, the goal is no subsidies for anything so the winners are chosen by economic reality.
Makes the small government wackos sound more appealing, doesn't it?
no, it does not, as the
no, it does not, as the teabaggers are fundamentally unserious about a true market based system. they are not pro market they are pro business. BIG difference.