As the Obama administration recedes into history, policymakers would be well advised to rethink the feasibility of taxpayer-funded renewable energy schemes.
In just a few weeks, the Solar Foundation, a Washington-based nonprofit group, will release its latest annual report touting growth figures for solar jobs while it also warns against policies that could result in layoffs.
But the hard reality is that even as solar energy became politically fashionable, it remained economically unsound.
Just ask Elon Musk, the South African-born, Los Angeles-based renewable energy business mogul who had his electric car company bail out his solar energy company last year.
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Neither company has been able to stand on its own two feet, and neither company has been turning a profit. But because both companies have been heavily subsidized, Musk was able to have U.S. taxpayers foot the bill to have one failing company bail out another.
Elon Musk is CEO of Tesla Motors and SpaceX. (Credit: Bobby Yip/Reuters/Newscom)
The good news is there are some on Capitol Hill who are beginning to ask some hard questions about the taxpayer-funded welfare payments pumped into failing industries.
Last year, the Senate Finance Committee and the House Ways and Means Committee launched probes into tax incentives paid to solar companies.
With the change in administration, it is possible there might be an end to the solar investment tax credit, which has been propping up failing solar enterprises on the taxpayer dime. So, expect the Solar Foundation to double down on its talking points in its upcoming report.
In America, anyone is free to lobby and push for their own personal policy preferences. Federal and state officials who have the power to give preferential treatment to this industry should know there are all kinds of conflicts of interest that should be taken into account.
For starters, the Solar Foundation is closely aligned with the Solar Energy Industries Association, a trade group that advocates on behalf of those that manufacture and install solar energy equipment.
That’s not all. Take a good look at who staffs the foundation and it becomes pretty clear this is not an objective organization.
Andrea Luecke, the foundation’s president and executive director, previously worked for the city of Milwaukee’s U.S. Department of Energy Solar America Cities program “Milwaukee Shines,” where “she helped Milwaukee implement policies aimed at increasing solar energy capacity.”
Deputy Director Pari Kasotia serves on the board of directors of the Iowa Renewable Energy Association and is active with Citizens Climate Lobby.
Program Director Yolanda Seabrooks spent eight years with SunEdison, one of the largest global renewable energy development companies aimed at providing solar photovoltaic systems to municipal, state, federal, utility, and commercial customers.
There’s more, but you get the picture.
The Solar Foundation staff is mainly made up of former solar company and trade association lobbyists and other advocacy positions and has ties to government solar advocacy programs.
Policymakers should not put their faith into a report designed to be an advocacy piece managed by solar advocates and lobbyists to produce an accurate depiction of the solar industry’s contribution to economic development.
Whenever state officials push back against solar power, the foundation’s operatives are quick to respond with scare stories about potential job losses. These stories are parroted by solar companies as well.
In Nevada, for instance, two solar companies threatened to end their operations in the state when the Public Utility Commission decreased the subsidy for net metering, a state-level policy that shifts the cost of a solar system to those who do not have solar.
The story quickly became national news and painted the picture that solar policies should not be reformed if states wanted to avoid any severe economic fallout. But the number of jobs that created in the solar industry remains a bit nebulous.
Moreover, there is growing body of research that shows the opportunity cost of government subsidies for renewable efforts versus the jobs that could be generated in the private sector is too high from the perspective of sound public policy.
Under the sins of omission, the Solar Foundation’s annual reports sidestep the question of opportunity costs. But they typically make lengthy references to large percentage increases in solar jobs that are as sly as they are misleading.
For example, the 2015 report stated:
The solar energy workforce grew an impressive 13.2 percent over the last year—nearly six times the overall national employment growth rate, and has grown 27 percent since 2010. This compares to only 3.2 percent national employment growth over that same period (August 2010-September 2012).
The relatively low base numbers (compared to the overall economy) for solar jobs means that, percentage-wise, solar job growth will seem impressive compared to the overall economy.
In simpler terms, if the solar industry had one job in 2015 and two jobs in 2016 and the utility industry had 500,000 jobs in 2015 and 560,000 jobs in 2016, the solar job growth percentage would be 100 percent to the utility job growth of 12 percent.
That is not an honest representation of what’s actually going down in the solar industry.
With a little digging, astute readers will find the Solar Foundation reports that government subsidies are primarily responsible for any growth the solar industry has experienced. The reports typically bifurcate state and federal subsidies into separate categories.
But when these figures are blended together, there is no escaping the prominent role government intervention plays in sustaining an industry that is otherwise unsustainable.
When all the government subsidies are added together, our calculations show that the U.S. taxpayer is really responsible for almost 33 percent of any growth that occurs in the solar industry. That’s not real job growth.
The Solar Foundation’s tax records show that it has experienced a steady jump in revenue.
In 2012 it had $296,243 in revenue, and in 2013 it had $886,715 in revenue. That’s a big jump! For 2014, which is the most recent year that tax records are available, it reported $976,991 in revenue.
Clearly, the foundation is not in the poor house.
The mission statement on the 990 tax form says the foundation was set up to “educate the public” about the benefits of solar power. In reality, it is carrying the water for well-connected special interests that have a vested interest in maintain taxpayer subsidies for unworkable renewable boondoggles.
So, when the Solar Foundation releases its next report on job growth, remember the source of the information and all that glitters is not gold.
