On Friday, the President showed up in Florida to take all the credit for something long in the making.
Specifically, he was singling out the rapid spread of renewable energy as a key feature of the American Recovery and Reinvestment Act in February 2009.
At the same time, the Dept. of Energy was sending out the equivalent of PowerPoint slides via twitter, and a DoE video and blog post listing Secretary Moniz as the author was posted with many of the same talking points.
The focus was clearly on wind and solar energy job and utilization growth, which isn’t surprising because of how big of a change has happened since 2008 for both, and is surprising because the stimulus plan has so little to do with it.
Basically, President Obama is pulling a classic political move, taking full credit for what received a nudge in the right direction, and would have happened regardless.
The Good Numbers
First off, the figures the president and DoE cite are impressive, and they bode well, both for consumers and conservationists. Specifically regarding renewable energy, they included:
- Over 30,000 clean energy jobs in the private sector
- 11,000 environmental management jobs for small businesses
- Financing for the first five utility-scale solar plants, with 28 existing today
- Renewable power for the equivalent of 6 million homes
- Wind power at $0.04 per kilowatt hour
- A 60% drop in solar panel prices because of “these investments plus innovation from the private sector”
Pretty good stuff all around, though I don’t care for that wind power cost figure
That is a subsidized cost. The real figure for unsubsidized wind power was recently estimated by Lazard, a worldwide leader in the financial advisory and asset management sector, at a little over $0.15 per kw/h in 2017.
We’re paying full rates, mostly through taxes, one way or another. It just doesn’t appear on utility bills as a result.
Recent news of solar deals going through for about $0.04 in a new Texas energy boom weren’t added, which is far bigger news.
However, that directly quoted, cringe-worthy line in the last bullet point stands out as pure BS, and it really needs to be addressed in detail.
The Bad Numbers
The $831 billion of spending, spread between 2009 and 2019, from the stimulus bill deserves some credit, but singling out renewable measures is disingenuous.
Of that $831 billion, $27.2 billion was set aside for energy efficiency, renewable energy research, and investment.
Of that, a fraction went to renewable power, mostly through guaranteed loans, which in turn represent a fraction of private investment.
Here is the breakdown of what really was allocated to, or could be routed towards, wind and solar energy-related programs:
- $6 billion for renewable energy and electric transmission technologies loan guarantees
- $3.1 billion for the State Energy Program to help states invest in energy efficiency and renewable energy
- $190 million in funding for wind, hydro, and other renewable energy projects
- $115 million to develop and deploy solar power technologies
A large portion of State Energy Program spending went to efficiency programs for consumers, like energy audits.
Even if you include it in the total tally going to wind and solar, you’re still looking at $9.4 billion, or a little over 11% of the total stimulus.
Plus the vast majority was for loan guarantees. Basically, an underwriting improvement service.
A minuscule amount of money — 0.037% — was committed directly to the actual wind and solar milestones the President cited.
Credit Where Credit is Due
In reality, far beyond the pale of opportunistic politics, virtually all the credit goes to private investment and the continuing improvement of technologies, especially for solar.
Solar cell prices dropped initially due to a glut of cheap, shoddy products flooding the market from Chinese state-subsidized manufacturers.
The market adapted without the help of the government, which was mired in squabbles over tariffs and market manipulation in World Trade Organization meetings.
Businesses survived by adopting new emphases on boosting efficiency, driving down costs, and implementing quality control.
Largely, this was done without the loan guarantees the government provided. Subsidies helped consumers and utilities, but businesses had to answer to investors that demanded long-term profitability.
Make no mistake about it, the rapid growth of renewables, solar in particular, is a private industry phenomenon, driven by companies that rose to this challenge, identified what was needed to drive prices lower, and made it happen.
Like the companies that address obvious solutions, such as implementing standardized, proactive quality control measures that have a return on investment of under a year and boost 99% of cells made to the highest grade, up from 75%.
That is the difference between losses and profits for struggling manufacturers using power-hungry production lines, and it doesn’t involve building new capital-intensive lines that may be obsolete in a matter of years.
And the companies that are driving up efficiency of the cells themselves, as high as 100% more power output — at half the manufacturing costs.
These new panels could be hitting the market later this year. The technology is proven and it is only a matter of commercialization.
The President can’t take credit for renewable growth, though he certainly is trying to in a PR push for his legacy.
Give credit where credit is due; the private companies and investors at the vanguard of what may be the biggest sea change in energy we have, or will see, in our lifetimes.
