Thursday, January 25, 2018

The Impact of Tariffs on Solar Energy

I just saw this shared on Facebook, which leads me to an economic evaluation I'm still ruminating:


The statement that "solar employs more people than coal and oil" is Fact 1, and it checks out on sites like Forbes.com:
In the United States, more people were employed in solar power last year than in generating electricity through coal, gas and oil energy combined. According to a new report from the U.S. Department of Energy, solar power employed 43 percent of the Electric Power Generation sector's workforce in 2016, while fossil fuels combined accounted for just 22 percent. It's a welcome statistic for those seeking to refute Donald Trump's assertion that green energy projects are bad news for the American economy.
That "welcome statistic" is one of the things I'm evaluating here.
The 30% tariff is a partial truth, as we'll see below. The rest of the text is opinion, which I'm also evaluating.

Fact 2 is this table, from the US Energy Information Administration:


Solar produces 0.9% of "utility scale" power. Not quite 1% of the total power generation.

Fact 3 is this report from Yale University
For all the conflict surrounding rooftop solar, solar energy last year generated just under 1 percent of U.S. electricity, and utility-scale solar farms have three times the generating capacity of residential solar installations. That disparity is likely to grow.
So let's add another 0.3% for residential. Residential installations, however, aren't made entirely on economic factors. If they were, you wouldn't do it at all. However, there is perceived value for the customer in independence (lowering dependency on utility-sourced power) and "being green". So this can (and does) grow in defiance of economic interests. However, in some states, being "off the grid" is a non-starter, as consumers are required by law to be connected to the power grid even when they are fully capable of producing their own power. Florida, for example, requires residential solar to shut off when the grid does to protect the lives of power workers. Some solar companies simply refuse to do business in such states.

Fact 4 is this article, again from Forbes, comparing the costs of utility scale solar:
Which Is Cheaper -- Rooftop Solar Or Utility-Scale Solar?
The study found that projected utility-scale PV power costs will range from 6.6¢/kWh to 11.7¢/kWh across all scenarios, while projected power costs for a typical, customer-owned rooftop PV system will range from 12.3¢/kWh to 19.3¢/kWh.
So utility scale solar is much cheaper. Still not as cheap as coal, nuclear, and hydroelectric generation, though:
There are no obvious fuel costs, but PV solar has O&M costs of about 1.3¢/kWh, which comes to about $400 million over the life of this array. So to produce 32 billion kWhs at about $2.3 billion means a life-cycle cost of 7¢/kWh. This is getting close to the range of normal baseload providers like coal, nuclear and hydro, which have life-cycle costs of 5.1¢/kWh, 4.1¢/kWh and 2.7¢/kWh, respectively.
Fact 5 is the tariff imposed is on imported solar panels. While @Now1Solar certainly seems to see this as a bad thing, their opinion is not shared by US manufacturers that the tariff is intended to protect. From Time.com:
Trump’s solar decision comes almost nine months after Suniva Inc., a bankrupt U.S. module manufacturer with a Chinese majority owner, sought import duties on solar cells and panels. It asserted that it had suffered “ serious injury” from a flood of cheap panels produced in Asia. A month later, the U.S. unit of German manufacturer SolarWorld AG signed on as a co-petitioner, adding heft to Suniva’s cause.
Even given that I am philosophically opposed to tariffs, whether this will substantially harm the industry depends a lot on whether you're talking about the domestic industry, the Chinese importers, or the overall picture once the industry stabilizes after the tariffs take effect. That said, it appears that at the very least, the meme is misleading in that it projects the harm anticipated by @Now1Solar to the entire industry, rather than limiting it to those dependent on importers. This is despite the fact that domestic producers will clearly benefit. Thus the projection of job losses is most certainly hyperbole. To what degree, I do not yet know.

Now, keep in mind the additional fact that energy companies are not in the business of hiring people. Rather, they hire people to further their business of producing energy. That energy, in turn, allows other companies to be productive and hire people. If we could, as a nation, produce energy with no labor at all, freeing people for more productive pursuits, we would.

Given all this; as rational beings, what conclusions are we to make regarding the economic efficiency of solar power (employing 43 percent of the sector's workforce to generate around 1.2% of the total power)? And is that really a "welcome statistic" for solar proponents?



UPDATE 1: here's a bit more on the implied "unfairness" of the imposed tariffs: From PV magazine, The case for U.S. solar manufacturing.

The article describes the illegal "dumping" of subsidized Chinese panels into the US market to drive American manufacturers out of business. And regarding the predictions in the meme at the top of this page,
Opponents also contend that relief from imports could cause layoffs in the installation business.  The same corner of the industry predicted similar job-loss fallout from the first two cases – losses that never materialized as the U.S. market kept right on growing.
And Tesla doesn't seem to be bothered at all: Tesla commits to Gigafactory 2 expansion despite Trump’s 30% solar tariff.
Together with Panasonic, Tesla has begun production of solar cells in-house at Gigafactory 2 in Buffalo. By manufacturing solar modules and photovoltaic cells at its New York-based facility, Tesla would largely be unaffected by the 30 percent tariff imposed by the US government.


UPDATE 2: If you've done the math and extended the amount of effort to expand solar from its current 1.2% capacity to replace the 83.9% of the power production currently provided by natural gas, coal and nuclear, you should quickly come to the conclusion that solar... sucks. It simply does.

Photovoltaic solar energy horribly inefficient. It seems to me the most effective way of using solar energy to produce massive amounts of electricity involves harnessing the Water Cycle. Let the solar energy evaporate water into the atmosphere, where it then precipitates on high ground. This runoff is then collected behind dams, where it turns gravity-fed turbines to generate electricity. 100% of the water that passes through the turbines is returned to the rivers and oceans to be re-evaporated as part of the Water Cycle. The major inefficiency of this system is that some of the water soaks into the ground or used by living things, and some evaporates from the reservoir prior to use for power generation. And YES. This IS solar power. It is infinitely sustainable and infinitely renewable. It's what powers the planet.

Again, this is THE most efficient use of solar energy. And it still provides only 6.5% of our total power. And we can't dam every river. (Well, we could, but we won't, and if we did it still wouldn't match our power consumption needs). So how do we make up the difference? Well, this talk by Michael Shellenberger should put solar in context compared to nuclear energy.


Keep in mind that Schellenberger's talk focuses on obsolete reactors. Modern reactors are much safer.

My conclusion: I'm completely unimpressed by the complaints of the solar lobby. Economically, solar energy is a luxury item, bought because you want it and can afford it. As it stands, 43% of our energy effort is expended providing limited amounts of solar energy to basically a few economically privileged homes. Good for them: it's a free market. But I'm not holding that up as a "welcome statistic" by any measure. It is, to use an electrically-charged word, "deplorable". Environmentally, solar makes no sense at all.



Sources:
  1. https://www.forbes.com/sites/niallmccarthy/2017/01/25/u-s-solar-energy-employs-more-people-than-oil-coal-and-gas-combined-infographic/#6a74fc022800
  2. https://www.forbes.com/sites/jamesconca/2015/07/30/which-is-cheaper-rooftop-solar-or-utility-scale-solar/#6010a23b1e5d
  3. https://e360.yale.edu/features/utilities-grapple-with-rooftop-solar-and-the-new-energy-landscape
  4. https://www.eia.gov/tools/faqs/faq.php?id=427&t=3
  5. http://time.com/5113472/donald-trump-solar-panel-tariff/
  6. https://pv-magazine-usa.com/2017/08/31/the-case-for-u-s-solar-manufacturing/
  7. https://www.teslarati.com/tesla-expanding-gigafactory-2-despite-trump-30-percent-tariff/

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