Despite $39B in Annual Gov't. Subsidies, Solar Produced 0.5% of Electricity in US

By Barbara Hollingsworth | February 17, 2015 | 3:15 PM EST


The Ivanpah Solar Electric Generating System, the largest solar power plant of its kind in the world, covers 5 square miles in the Mojave Desert near the California-Nevada border. (AP photo)

( – Despite receiving an estimated $39 billion in annual government subsidies over the past five years, the solar energy industry accounted for just one half of one percent (0.5%) of all the electricity generated in the U.S. during the first 10 months of 2014, according to the U.S. Energy Information Administration (EIA).

Between January and October of last year, the U.S. produced a total of 3,431,473 million kilowatt hours (kWh) of electricity. But only 15,973 million kWh were generated by solar thermal or photovoltaic (PV) solar modules that use semiconducting materials to convert sunlight into electricity, according to EIA's latest Monthly Energy Review.

The amount of solar power generated last year was up from the 9,252 million kWh produced in 2013, but still remained a tiny fraction of the nation’s total power generated in 2014 despite billions of dollars in subsidies spent on hundreds of solar programs at the federal, state and local level.

The U.S. Department of Energy’s (DOE) “Sunshot Initiative” proposes to have solar energy account for 14 percent of all electricity generated in the U.S. by 2030 and 27 percent by 2050. But even among renewable energy sources, solar still accounts for just a small percentage, according to the EIA.


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Although sunlight is free, capturing and storing the sun’s energy in the form of electricity is definitely not. Diana Furchtgott-Roth, a former chief economist at the U.S. Department of Labor, noted last year that “if the 27 percent of U.S. electricity generated by natural gas came instead from solar power, consumer costs for monthly electric bills would increase about 25 percent.”

In 2008, then presidential candidate Barack Obama promised five million new “green” jobs, including jobs in the solar industry, where employment increased 22 percent between November 2013 and November 2014.

However, a January 27, 2015 report by the Congressional Research Service (CRS) stated that “the solar manufacturing sector supported 32,490 jobs nationwide in 2014,” which amounted to just a “tiny sliver of the more than 12 million domestic manufacturing jobs in 2014.”

Competition from China, which manufactures 70 percent of the world’s solar panels, and the availability of cheap natural gas to generate electricity has negatively impacted a number of American solar companies, mostly located in California, Ohio, Oregon, Texas and Washington State.

”Some PV manufacturers have closed their U.S. operations, some have entered bankruptcy, and others are reassessing their business models,” the CRS reported, adding that “a large share of the facilities that have closed [including Solyndra, Inc.] operated for less than five years.”

“In the absence of continued government support for solar installation or for the production of solar equipment, the prospects for expansion of domestic PV solar manufacturing may be limited,” CRS noted.

Even with massive government subsidies, some solar projects have not lived up to expectations.

For example, a project to install solar panels on schools and other public buildings in three counties in New Jersey that was supposed to pay for itself by allowing the counties to sell excess electricity back to the grid was touted as a national model four years ago. But the deal has gone sour, with only half of the work completed and taxpayers on the hook for $88 million.

"Solar energy remains prohibitively expensive - often three times more than electricity produced from natural gas and other sources," according to a report by the Taxpayers Protection Alliance (TPA) entitled Filling the Solar Sinkhole: Billions of Bucks Have Delivered Too Little Bang.

That includes the Ivanpah Solar Electric Generating System in California, the largest solar power plant of its type in the world, which generated only about half of the electricity it was expecting to produce last year due to “fewer sunny days” than initially predicted.

“Despite reaping $1.6 billion in subsidies, [Ivanpah] produces electricity at a cost 3 times higher than traditional power and has requested $539 million in additional direct handouts from the federal government,” the report said.

“We’re shining a bright spotlight on the darker side of solar power,” said TPA president David Williams. “Taxpayer-backed loans to the solar industry, bailouts, and publicly funded grants cost Americans more than $39 billion annually. Despite these massive costs, taxpayers aren’t even benefitting with lower electricity prices.”

In addition to the federal tax credits, grants, guaranteed loans and other subsidies, "there are 43 different solar-power-related tax breaks available across 20 states" as well as "538 different state and local green energy rebate programs across the United States," TPA researchers found.

"These schemes are intended to reduce the final cost of products including solar water heaters and grid-connected rooftop solar panels to make them more appealing to customers." However, even with generous government subsidies, including a tax credit that reduces the cost of installing solar panels by 30 percent, "none of it has worked," the TPA report concluded.

"With so little to show for so many costly initiatives, it should be apparent to objective observers that federal solar power efforts have not been a productive or prudent use of precious tax dollars."