Solar toys

On Oct. 25, 2009, Barack Obama presided over the beginning of operation of the largest solar-energy facility yet built in the United States. "Largest Solar-Panel Plant in U.S. Rises in Florida" by Christine Armario, Associated Press, Oct. 23, 2009, brings word that this plant cost $150 million to build and is sited on 180 acres of Florida land. It is touted as a "25-megawatt" facility.

"Florida's New 90,000-Solar-Panel Power Station" by Energy Matters, Renewable Energy News, Oct. 12, 2009, reports that the builder, Florida Power and Light Company, estimates that it will produce 42,000 megawatt hours per year of electricity.

(42,000) / (24) (365) = 4.8 megawatts. (4.8) / (25) = 0.19 – so the plant actually produces, on average, 19 percent of the energy produced at its peak output under perfect conditions – the "25-megawatt" figure. This fivefold difference is typical of reports on solar installations.

The annual 42,000 megawatt hours at 6 cents per kilowatt hour (the current price in Oregon) is worth $2.52 million. At 10 cents (a reasonable national average for "on peak" power – "off peak" costs much less), 42,000 megawatt hours is worth $4.2 million.

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Using 6 cents, ($150 million) ÷ ($2.52 million per year) = 60 years. At 10 cents, ($150 million) ÷ ($4.2 million per year) = 36 years. Moreover, these are ordinary consumer prices. Industry uses large amounts of less expensive "off peak" power – power generated when public use is lower, such as at night. These estimates of years to recover cost do not include maintenance and other expenses.

The Palo Verde nuclear-power station – long ago fully paid for by power generated during its first few years of operation – currently produces electricity at a cost of 1.65 cents per kilowatt hour. At this price, the Florida array would require 214 years to pay its costs of construction – if it were in competition with nuclear power that is available whether or not the sun is shining.

At current consumer rates and operating costs, the new Florida solar array will need to operate for a long time just to return the capital that was required to build it. In competition with Palo Verde, this would be more than 200 years. Since the estimated lifetime of solar panels is now about 30 years, maintenance and replacement costs will extend the payback period. Moreover, solar-panel output diminishes over time. The Florida array has a realistic capital return period of at least 50 years – about the same as the Nellis Air Force Base and Google solar plants.

Ah, but the critics will reply, electricity is going to cost far more in the future; government rules require that this electricity be purchased at higher "green" prices; and the cost of the installation was much less due to government tax-financed subsidies. These distortions of the market do not enrich Americans. They raise costs and make Americans poorer.

Higher electricity prices raise the costs of industry, waste capital and thereby raise the effective cost of the plant. Cycling the capital through government also raises the price, since capital is lost during passage through political and bureaucratic hands.

Florida Power and Light brags that this new solar plant will power 3,000 homes. This is $50,000 per home – for which the home gets 38 kilowatt hours per day. That 38 kilowatt hours is enough to power one ordinary one-room electric space heater. In other words, this $50,000 per home capital expenditure provides enough electricity for some lights, a personal computer and occasional cooking. Forget about heating, air conditioning or recharging your electric car.

This Florida plant was built in one year – demonstrating that bureaucrats can get off the backs of engineers when it serves their political interests. Nuclear plants would require 10 to 15 years, with current government-caused impediments. The Florida plant, however, does not produce electricity. It stores electricity.

Coal, nuclear, and hydro electricity was used to manufacture the solar array. That energy will gradually be recovered over a 50-year period, along with the cost of other resources used to build the plant. Only after that time could the plant produce anything of net value.

[Note: It would require the entire power output of about 100 of these Florida solar arrays – costing $15 billion and covering 30 square miles of land – to power one SR-71 Blackbird flying at Mach 3. Imagine trying to defend the United States with solar-panel energy.]

Meanwhile, China is currently building the world's largest solar array, and the green media is grandly crowing that China has seen the light and is joining the green-energy revolution.

China is building hundreds of new coal-fired power plants and dozens of nuclear-power plants – and has 132 nuclear plants in various stages of planning and construction. "Green" energy makes up about 1 percent of China's new energy installation. This 1 percent is obviously being built for political advertising purposes. China also plans to sell lots of solar panels to the United States. Energy produced by China's coal and nuclear industries will be stored in solar panels, shipped to the United States and gradually released over the next 50 years. U.S. capital paid for the panels will build nuclear and coal-fired plants in China.

The entire U.S. energy trade deficit could be reversed and electricity prices lowered fivefold by the construction of 50 nuclear-power stations with 10 reactors each for a private capital cost of between $1 trillion and $2 trillion. In a free market, this would be accomplished by a combination of new nuclear and hydrocarbon power plants. Under current U.S. government impediments, this will never be done.

With industry restricted to "green" methods, such as solar panels, and with hydrocarbon energy stifled by cap-and-trade, reversing the energy trade deficit would cost $20 trillion. This is beyond the resources of our currently decapitalized, deindustrialized nation.

For 30 years, U.S. energy production has gradually been restricted by U.S. government actions. Now, with the new Marxists and socialists in charge in Washington, this energy restriction has been markedly increased. Without energy at competitive prices, our country has a very dim future.

If these political processes are allowed to continue, before long there will not be sufficient capital in the United States to correct the problem. If, after that, we manage to change course and build those 50 nuclear power stations, the capital will come from abroad – and the American people will be enslaved to foreign owners.

Dr. Arthur Robinson is president and research professor of the Oregon Institute of Science and Medicine.