Wind and solar not viable without massive direct subsidies
The only way that wing-toaster and slice-and-dice power plants are economically viable is with massive federal subsidies. They just can’t proceed without heavy taxpayer funding. Here are a few of the recent articles I’ve seen making that point:
Abengoa is now the full owner of the Palen Solar Electric Generating System. That project, another concentrating solar project like Ivanpah, was put on hold in November 2014. Public comments by Abengao’s CEO indicate the project won’t go forward unless the 30% investment tax credit is extended past its current expiration of December 31, 2016.
After 1/1/17, the taxpayer subsidy drops to 10% for industrial scale facilities.
By the end of 2016, solar projects have to be producing electricity, not just under construction. Expectation is the project won’t be that far along and thus would lose defacto reimbursement for 20% of the total cost.
Without assurance of getting an extra 20% ITC, the project is economically unfeasible.
Thus my main point: industrial scale renewable energy will not work without huge taxpayer subsidies.
1/25 – New York Times – Worry for Solar Projects After End of Tax Credits – The massive solar projects are unfeasible economically without massive federal subsidies. Article points out the 30% investment tax credit drops to 10% at the end of 2016. Woven throughout the article without explicitly saying so is that several projects won’t go forward without that specific massive subsidy.
Even a direct funding of 30% of the cost isn’t enough. Projects also are so shaky that they can’t afford to pay market interest rates on the money they borrow. The article says that huge loan guarantees are needed, which bring down the interest rate.
Solar projects would be massive failures if they had to stand on their own.
11/15/14 – Dickinson Press – Lawmakers eye wind energy tax credit extension – The House representative and both senators from North Dakota hope and expect the humongous tax credit of 2.3 cents per kilowatt-hour for wind electricity to be extended to 12/31/15. It expired at the end of 2013. Huge production credits, huge tax credits, along with forced demand from utilities are major reasons for the boom in slice-and-dice towers sprouting across the country.
Update: Production Tax Credit was passed by House and Senate in December 2014. Projects on hold can proceed.