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Chuck DeVore- Contributor

Assemblyman Chuck DeVore represents 450,000 residents of Orange County California’s 70th Assembly District.. He served as a Reagan White House appointee in the Pentagon from 1986 to 1988 and was Senior Assistant to Cong. Chris Cox. He is a lieutenant colonel in the Army National Guard. Chuck’s novel, CHINA ATTACKS, sells internationally and has been translated into Chinese for sales in Taiwan. [go to DeVore index]

Million Solar Roofs Misstep
Okay, okay... the Governor's not right on everything...
[Chuck DeVore] 6/17/05

On union power, taxes, and government reform, Governor Schwarzenegger is fighting the good fight, so we can forgive him when he occasionally misfires. His “Million Solar Roofs Initiative” is one such error.

A darling of the environmental movement, photovoltaic (PV) systems cleanly convert sunlight into electricity. This would be great but for one problem: they just do not pencil out. They are costly. When installed, they rarely produce the electricity at the rates claimed. Furthermore, even with subsidies, PV cannot pay for itself.

Senate Bill 1 is the legislative vehicle for the governor’s initiative. It passed out of the California State Senate on a 30-5 vote with five conservative Republicans in opposition. In the coming months the State Assembly will consider the measure, where many expect easy passage followed by a swift trip to Gov. Schwarzenegger’s desk for approval.

Exposed to the light of day, however, the Million Solar Roofs Initiative is not worthy of such uncritical support.

The governor proposed the Million Solar Roofs Initiative as a way to install 1,000,000 PV systems on residential and commercial sites by 2018. There are currently about 12,000 PV systems in California producing about 93 megawatts (MW) of power. Boosting PV systems by one million would produce about 3,000 MW of power. In comparison, each of the two nuclear generating units at San Onofre in northern San Diego County produces 1,100 MW. Because PV costs $9,000 per kilowatt to install, nearly seven times the cost of nuclear power, it requires what uber-Schwarzenegger economics advisor Dr. Milton Friedman would call a free-market distorting subsidy to entice people to consider installing a system.

How much of a subsidy? Supporters of the plan predict from $2 to $2.5 billion over the next ten years to get people interested in PV systems, while one utility estimates the cost could reach $7 billion. Payment for this subsidy would come in two forms. The first would be an extension of an existing 7.5 percent tax credit for PV and wind power through 2017. The second would be rebates paid by electric ratepayers of $2.80 per installed watt. Together, both subsidies would equal about $10,000 for a typical home PV installation.

The new and existing government support for PV would reduce the cost of a residential 3,000 kilowatt installation from about $27,000 to $17,205. Excluding a 2004 analysis of PV installations showing that they only produced 39 percent of their rated capacity during peak demand, if the system performed as claimed, the residential PV system owner would save $371 a year on his electric bill. The yearly savings are less than 2.2 percent of the subsidized cost of the system. Any return on investment would be impossible.

The deal gets better. In exchange for saving nothing, the upper class homeowner with a BMW and a Mercedes in his garage, who can actually afford to waste $17,000 to assuage his environmental guilt, can pass on $10,000 of his costs to Juan Q. Public who will pay $15 a year more for his electricity. This, of course, is on top of the generous tax breaks for wealthy environmentalists.

California’s homeowners already pay 55 percent more for their electricity than the national average. California businesses pay 94 percent more than the rest of America. While that most endangered of California species, industry, forks out 146 percent more for their electric bill than their out-of-state competitors.

The solution to the energy problem vexing California is not to be found in underwriting costly photovoltaic systems. Rather, one clean and economic solution would be to remove the outdated political roadblocks to building more nuclear power plants. Nuclear power is the one concentrated source of non-greenhouse emitting energy we Americans can build and fuel ourselves. Furthermore, technical advances in plant design, fuel reprocessing and waste storage have made nuclear power much safer. San Onofre Nuclear Generating Station alone each year saves 188 billion cubic feet of natural gas or 20 to 25 million barrels of oil. While we don’t seem to find much about the French worth emulating, it is of note that nuclear power produces 80 percent of the electricity on France’s power grid.

Ironically, if America had not succumbed to the irrational fear of nuclear power over 20 years ago America would already be meeting our Kyoto Treaty protocols for the reduction of carbon dioxide (CO2) emissions.

While I am sympathetic to the measure’s intent, SB 1 is the wrong answer. Instead of legislating a winning technology and eliminating competitive pressure to innovate and cut prices, we should encourage the construction of cost-effective and low-polluting power.

Conservative Republicans in the Assembly may not have the votes to derail this uneconomic solar initiative, but when Democrats in the Assembly Latino Caucus realize their working class constituents will be the ones paying to install PV systems on the homes of the well to do, the tide may turn.CRO

copyright 2005 Chuck DeVore