Backward Policies Won’t Stop Solar Boom

The earth is in the midst of a shiny solar boom. So why on earth is anyone thinking about pulling the plug?

From the European Union tearing away subsidies to American politicians embracing controversial solar taxes, the accelerating sunshine industry is looking into its promising future and facing hurdles. But this isn’t your older sister’s global solar sector anymore, circa 2000. No amount of delay or denial from oil and gas holdouts — like the Koch brothers, who own most of the land leases for Canada’s lethal tar sands — or more banal readjustments in investment allocation are going to forestall the inevitable ascendancy of Generation Photovoltaic. Think of rumors and threats of solar taxes and subsidy cuts as just your usual cutthroat business as usual — but with solar eventually on top, where it belongs.

“The cut-back in tariffs was inevitable, and they were designed as such,” RenewEconomy editor and analyst Giles Parkinson told me of the EU’s nevertheless unfortunate back-stepping on state funding for renewables. Under pressure from solar paragon Germany, last seen in a price war with China, the EU decided to offset funding for renewables with increased support for copper, steel, aluminum, plastics and chemicals industries, according to Bloomberg. This is happening just as the UK is threatening Germany’s solar dominance — for once.

“As costs come down, the need for incentives is also reduced,” Parkinson added. “The important thing to note is that while assistance has fallen, the scale of ambition for the deployment of renewables remains unchanged, particularly in Germany. As tariffs are reduced and removed, this simply makes renewable energy, particularly distributed generation, an even more powerful economic factor than it was before.”

“Renewables today at the wholesale level in the market are not contributing to higher prices, but lower prices,” European Commission vice president Joaquín Almunia said, after the EU’s move caused consternation among environmentalists and investors. “The question is how to combine support for renewables with these advantages of clean energy and lower wholesale prices, but also distribution of efforts to finance these new technologies.”

But the financing argument is a specious one, because fossil fuels enjoy exorbitant subsidies that would make any industry thrive. Financing never seems to be a problem for the gluttonous oil and gas sectors, which according to the International Monetary Fund take $2 trillion in subsidies. Renewables funding is less than chump change, compared to the lethal political and economic advantage afforded to an industry that is engaged in the steady destabilization of the planet’s climate. Simply chopping subsidies for dirty fuels, the IMF reasoned, would gift the earth and its people with a 13 percent decline in carbon dioxide emissions.

“There are numerous state support policies for other sources of energy, and even other sectors of society, that have been in place for much longer, and remain in place with no discussion,” CleanTechnica director Zachary Shahan told me. “Furthermore, it’s hypocritical to not allow such state support for renewables while the health, climate and foreign security costs of fossil fuels are not adequately priced. That is essentially leaving subsidies for fossil fuels in place, while pulling mechanisms from certain countries that are trying to counter those.”

“It’s also hilarious that nuclear was not held to the same standard, due to the European Commission not having enough ‘expertise’ on that matter,” Shahan added. “Hilariously sad, I should say: The EU Commission has decided to cut very specific incentives for renewable energy, but allowed exactly the same type of incentives for nuclear energy.”

Like oil and gas, nuclear energy has little logical future. Solar has begun to achieve price parity in Europe, hopefully foreshadowing its American future, so nuclear will no longer be a cheaper option. There’s also the problem of what to do about nuclear’s deathless waste. “Nuclear power is safe!” wisecracked Sierra Club president Michael Brune on Twitter. “That’s why $1.5 billion is being spent to cap Chernobyl, still emitting radiation 28 years later.”

“Feed-in tariffs require that utilities buy electricity from certain sources like solar for specified minimum prices,” said Shahan. “This is akin to requiring that companies pay employees a minimum wage, or more. It is an acceptance that there is a minimum level of value that is being provided that must be compensated. To say that such feed-in tariffs are illegal is ignorant at best, a reflection of corruption in EU policies at worst.”

Call it corruption, call it an indefensible privileging of obsolete energy models and producers over their cleantech replacements, or call it what you will. But whether it is Europe or Oklahoma — which recently opened the door for tariffs levied on solar adopters rather than in support of them — anyone can call the long energy game without too much strain. In the final analysis, unfairly withdrawn subsidies and imposed solar taxes are frustrating examples of a polluting paradigm on its last legs. As much as we may debate their minutiae, these half-measures against renewables have no real future.

“It’s interesting to note that the biggest utilities, such as RWE and E.ON, are now recognizing that they should have addressed renewables much earlier, and are now refocusing their business models around distributed generation,” Parkinson said. “Still, a lot of companies with significant assets that will lose value in such a transition are trying to delay the inevitable. I don’t think that solar taxes will last long when the costs are properly analyzed over time, and more people want to take it up.”

This article appeared at Solar Energy