I have been studying solar power since the early 1970s when environmental groups urged the abandonment of nuclear power and the use of solar energy as its replacement. Back then, solar energy was not economical and it still has problems today. You might say the environmental groups were successful–all new nuclear power plant sales stopped in 1977 and about 70 planned units were canceled. The industry did not revive until Georgia Power made its purchase of the two new Plant Vogtle units a couple of years ago.
For Georgia, a 1 kilowatt solar PV plant generates 1200 kilowatt-hours of electricity per year. Real-time operating data for the Atlanta area can be found here. Data from this source, Department of Energy solar energy maps for the United States, and operating data from existing solar plants out West are the basis for my estimate.
Solar PV cells deteriorate with time and their useful lifetimes is no more than 20 to 25 years. A generous estimate for electricity produced over the 1 kilowatt solar plant lifetime is 30,000 kilowatt-hours. Thus a plant costing $6000 per kilowatt would produce electricity at $0.20 per kilowatt-hour ($6000/30,000). This does not account for cost of money, maintenance (somebody has to clean the leaves and pollen off the units), and insurance on systems from damages from fires, hailstorms, etc. The realistic cost of solar electricity is probably around 40 cents per kilowatt-hour or higher.
The $6,000 per kilowatt number is for costs of large solar plants being built in desert regions of the Southwest. Small residential units would probably cost far more due to the economies of scale. Due to more sunlight in Southwest desert regions, solar plants produce about one-third more kilowatt-hours per year than in Georgia–1600 kilowatt-hours annually. The economies are poor in that region; so residents of Georgia should expect higher costs for electricity.
Sellers of solar plants are in the business to make money. They exaggerate the prospects of solar energy. A typical example published frequently in The Atlanta Journal-Constitution is a one megawatt solar plant will supply power for 450 homes. It might power a one-bedroom apartment, but it won’t power more than 120 homes. Buyers of solar plants will suffer huge losses or someone else is going to pay for facilities through subsidies.
There are many forms of subsidies for solar plants. Rebates of 30 percent of plant costs are given by the federal government. Rebates may be given by state and local governments. Georgia provides a rebate of 35 percent of plant costs up to a cost of $500,000, with an annual limit of $5 million each for commercial or residential use. Those promoting solar energy in Georgia may want the $5 million limit increased. Other subsidies are forcing Georgia Power or EMCs to buy back excess electricity at a high premium rate such as 17 cents per kilowatt-hour or more. The cost of producing electricity from current coal, natural gas, or nuclear power plants is about 4 or 5 cents per kilowatt-hour. Thus the utilities are forced to buy back electricity at far higher rates than their cost of production or even cost of sales.
Solar providers replace electricity from Georgia Power or EMCs. Georgia Power or EMCs have to build and maintain transmission lines, repair facilities damages by acts of nature, bill customers, install new service, etc. that is overhead for running this type of business. The solar providers don’t pay for this overhead, so the losses have to be made up by charging higher rates for customers of Georgia Power or EMCs that use their reduced level of electricity sales.
The final result is Georgia Power or EMC customers will have to pay higher rates due to subsides given to solar energy users by buybacks of excess electricity at elevated costs and not making payments for overhead in providing electricity.
Solar energy is not economical. The arguments are as ludicrous, like creating jobs by taking blades from tractors to make shovels with the steel. Lots of jobs are created by people shoveling dirt but the work is useless due to the unnecessary expense.
Keep in mind, Germany and Spain have spent huge sums on solar energy and their electricity customers are paying rates of multiples what is paid in Georgia. Similar problems exist in California where electricity rates for all uses is 15.77 cents per kilowatt-hour compared to Georgia’s 9.71 cents per kilowatt-hour–a 62 percent increase (DOE September 2012). The national average is 10.31 cents per kilowatt-hour–6 percent higher than Georgia’s. Georgia does quite well on electricity rates considering the state has no natural resources of fossil fuels–coal, oil, and natural gas. States like Wyoming can build power plants on mine mouths.
James H. Rust, Professor of nuclear engineering and policy adviser for the Heartland Institute