“The Hole in the Rooftop Solar-Panel Craze” is a Wall Street Journal editorial (May 17, 2015) that heaps scorn on the way that America’s crony capitalist system encourages domestic rooftop solar power. Here’s a sample:
Recent studies by Lazard and others, however, have found that large, utility-scale solar power plants can cost as little as five cents (or six cents without a subsidy) per kilowatt-hour to build and operate in the sunny Southwest.
Large-scale solar-power prices are falling because the cost to manufacture solar panels has been decreasing and because large solar installations permit economies of scale. Rooftop solar, on the other hand, often involves microinstallations in inefficient places, which makes the overall cost as much as 3½ times higher.
Yet the federal subsidies for solar amount to about $5 billion a year, with more than half of that amount going to rooftop and other, more expensive, non-utility solar plants. If the federal government spent the $5 billion instead subsidizing only utility-scale solar plants, I estimate that it could increase the amount of solar power installed in this country every year by about 65%. And without net metering and all of the other nonsensical state and local subsidies for rooftop solar, we could save this country billions of dollars every year.
The author doesn’t calculate the full amount of the wasted dollars because, presumably, it is too hard to find out what each of the 50 states is doing.
First, do we believe this guy? Brian H. Potts is the author and (1) he is a lawyer who works mostly for utilities, (2) he doesn’t look old enough to shave.
If Potts is right, is it reasonable for him to expect a program run by the U.S. government to be efficient? Car emissions reductions, for example, have been handled in what economists would call the dumbest and most expensive possible way. Instead of measuring emissions every year when cars are inspected and taxing each car owner according to miles driven and pollution emitted per mile, standards are promulgated for new cars and society has to wait 10-20 years to see an effect. The result is that a small percentage of older/mistuned cars generate most of the pollution (example study). Why wouldn’t we expect solar energy production to be handled in a similarly inefficient manner?