Without Government Backing, Solar Power Can’t Compete


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Steve Birr Vice Reporter
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The government is going to pull the plug on the solar industry’s key tax credit as evidence mounts that the often touted renewable source cannot compete with traditional energy.

“Solar power’s value as a grid resource is limited because we simply can’t count on it to meet peak demand in the evenings,” Travis Fischer, economist at the Institute for Energy Research, told The Daily Caller News Foundation. “In fact, solar power could cause major problems if implemented on a wide scale due to its daytime-only production profile.”

Solar power has been on the rise in the U.S. and is often touted as the technology of the future, but the industry relies heavily on government incentives due to the costly installation of panels. Solar power also faces criticism due to its unreliability during the power grid’s peak demand hours.

The 30 percent investment tax credit for solar power will expire at the end of 2016, threatening the long term future of the industry. The solar industry has been expanding in the U.S. with installations up 30 percent on the year, according to The Wall Street Journal. But critics warn that much of this success is due to government efforts to pick winners and losers in energy and cast solar power as an updated and modern technology.

“Advocates like to leave the impression that solar power is an exciting, new technology with a limitless future. In reality, solar power is not new–photovoltaic solar panels date back to 1883,” said Fischer.

Experts warn that ending the subsidy will devastate solar power and could cost the industry thousands of jobs. Bloomberg estimates a two-thirds drop in solar instillations in 2017 if the credit expires, reports The Wall Street Journal. According to Energy Information Administration data, rooftop instillations could plummet 94 percent while utility scale projects could drop by 100 percent.

Given solar power’s expense many remain critical, questioning the wisdom of government subsidies for the technology. It also caters to the more affluent, with solar panels on less than 5 percent of homes with incomes under $40,000. Household solar panel systems can cost over $20,000 and the average solar equipped house is 34 percent larger than non-solar houses, reports the Pittsburgh Post-Gazette.

Some industry experts believe solar energy can and should stand on its own in the energy market, arguing that it has become commercially viable. A recent study from Bloomberg shows that even without the tax credit, solar capacity is on pace to rise by 2022, reports The Wall Street Journal. With only 0.4 percent of U.S. electricity coming from solar power in 2014 however, experts question its overall importance to America’s energy future.

“Despite being heavily subsidized by handouts like the investment tax credit, solar power still makes up only a small fraction of the electricity we need to keep the lights on,” said Fischer.

Overall the solar industry has been struggling, with energy stocks getting decimated in 2015. Elon Musk’s solar energy company SolarCity made headlines last week when they said they were trying to reduce the credit rating needed to buy their panels in an attempt to lure buyers. Advocates for solar subsidies will continue to lobby Congress to extend the investment tax credit before it expires in 2017.

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