Prices for solar panels have come down in recent years, leading many greens to think the renewable energy source’s days in the sun has finally arrived. In fact, recent analysis from the consulting firm Lazard suggests that the levelized cost—a metric used to compare the price to produce a given amount of electricity across multiple energy sources—of utiltiy-scale photovoltaic solar panels ranges between $72 and $86 per megawatt-hour, making it competitive with the vast quantities of natural gas currently enjoying a renaissance in the United States. But as the Breakthrough Institute reports, Lazard’s estimates don’t stack up with the energy experts at the Intergovernmental Panel on Climate Change or the Energy Information Administration:
Solar costs have plummeted in recent years. But unfortunately, as costs have come down, it’s only become more difficult to get reliable estimates of what the costs actually are today. This is what happens when analysts cherry-pick from among the most successful projects and emphasize the subsidized costs of energy, ignoring incentives like tax credits, portfolio standards, and net energy metering. What the most comprehensive data show is that, when all costs and available project data are taken into account, solar remains significantly more costly than fossil fuel competitors.
The fact is, solar is a viable option only after it’s received generous government support. That’s true for photovoltaic panels, and it’s also true for a different kind of solar technology. The NYT explains:
[E]xisting solar thermal plants have benefited from heavy government support in the form of loan guarantees — $1.2 billion in the case of the Mojave plant — but that program is no longer active. As a result, utility-scale development, which accounted for almost two-thirds of the nation’s solar capacity installed last year, according to industry estimates, could drop off.
It doesn’t make sense for governments to pour resources into subsidy regime schemes designed to prop up technologies—no matter how green—that are incapable of competing on cost on their own merit. There’s a huge opportunity cost here that few environmentalists seem to acknowledge: the money that’s gone to incentivize the production and installation of today’s generation of solar panels could have been better spent on the research and development of tomorrow’s technologies. Instead, green advocates have squandered billions of dollars and plenty of political capital setting up subsidies for inefficient energy sources. What a waste.