Separating Myth from Fact

on Solar

Patti Gettinger, GTPI Energy Policy Director

July 2013

Would you buy this car?

X

X

X X

X

Doesn’t start all the time

Gets 3 mpg

Has recalls on engine

Need a taxi for backup

transportation

Dealers going bankrupt

Bankrupt dealers

can’t honor warranty

Another car is cheaper and

more reliable

Whether the car runs or

not, payment must be paid

Then why would you want solar?

X

X

X X

X

Doesn’t work at night;

Produces less when rainy

Operates at 20-25% of capacity

Industry has problems

with defective panels

Requires backup power

for continuous electricity

Solar companies going bankrupt

Bankrupt dealers

can’t honor warranty

Traditional forms of

generation are more

reliable and more efficient

Whether the plant

produces or not, expenses

must be paid

PSC vote on renewable portfolio

standard

• Definition of Renewable Portfolio Standard (RPS):

– State mandates or sets goals for utility companies to acquire some of

their energy from “renewable” energy sources to achieve annual yearly

quotas, with the quotas generally increasing over time

– Also known as Renewable Energy Standard (RES)

• Today the PSC voted to force Georgia Power to increase its solar

capacity by double the amount already in its Integrated Resource

Plan (IRP) by 2016 - (essentially establishing an RPS)

– Of the 525 megawatts imposed, 425 from large scale, 100 from small

– Amendment passed that “banned” solar bids that would drive up rates

– Vote was 4-1 (Wise opposed)

• The Georgia Tea Party opposes forcing utilities to buy or use

more solar than they are prepared to do on their own

Source: US Energy Information Administration

5 states represented 83%

of solar generation in

2011 (latest data

available) and have the

lowest annual rainfall

49%16%

5% 7%

6%

MYTH: Georgia has high levels of solar radiation

FACT: Georgia has significantly less solar resource and more rain than

the desert areas of the US where most solar facilities are concentrated

A rainy year could be devastating if we depend on solar

instead of traditional sources of electricity generation

Source: National Weather Service

It’s been a rainy year in Georgia!

MYTH: Solar will lower rates by reducing ratepayer

costs to replace traditional sources

Plant Type Capacity

Factor (%)

Total Levelized

Cost $ Mwh

Nuclear 90% $108.4

Conventional coal 85% $100.1

Nat gas CCC 87% $67.1

Hydro 52% $90.3

Solar PV 25% $144.3

Solar Thermal 20% $261.5

Source: US Energy Information Administration

Capacity factor: compares how much electricity a generator actually produces with the maximum it could produce at continuous full power

operation during the same period.

Levelized cost: Per-kilowatt hour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty

cycle. Key inputs to calculating levelized costs include overnight capital costs, fuel costs, fixed and variable operations and maintenance

(O&M) costs, financing costs, and an assumed utilization rate for each plant type.

FACT: Solar produces little energy and costs more to build than other

sources given its output

MYTH: There are no fuel costs; Sunshine is free

FACT: Solar power is NOT free; you can’t have continuous power

“off-the grid”

• Because solar power is intermittent (doesn’t produce all the time),

back-up generation is necessary to provide continuous power,

usually in the form of electricity from natural gas

• Peak demand is from 4pm to 7pm

• Solar power generation peaks about 1:30 pm at the height of the

sun, and declines to zero at sunset

– Rainy/snowy/cloudy days can cut solar generation

Solar has raised costs everywhere it has

been implemented

• California - power customers who don’t install solar panels are preparing to cough up an extra $1.3 billion due to a mandate that power companies pay homeowners with solar panels the same rate for a kilowatt-hour of

electricity as they charge other customers

• Hawaii - Hawaiian Electric Co. customers who don't have solar panels installed will see their rates go up to

make up for the revenue lost by the increasing number of homes and businesses that are installing photovoltaic

systems. The rate increases are needed to cover fixed costs such as meter reading and billing.

• Ontario, Canada - Green Energy Act, which calls for closing down all coal-fired generation in the province by

2014, is now 10 times more costly than installing pollution-control equipment on existing coal plants and

making it uncompetitive for businesses – some of which are relocating to avoid future increases estimated at

40-50%

• Australia – the push toward solar energy has contributed to a more than 20% hike in the retail price of power

• Germany - Chancellor Angela Merkel admitted that “spiraling costs in Germany for developing renewable energy

sources could damage the country’s economic competitiveness and need to be scaled back.” Germany has some

of the highest electricity prices in the western world and reliability issues that hurt manufacturers

and threaten jobs.

Myth: Georgia-made solar panels have 30-yr production

guarantees and a 40+ year life expectancy

FACT: The solar industry is experiencing severe defect rates and

many companies are going bankrupt

• Solar companies around the globe are going bankrupt– China’s largest producer, SunTech, went belly-up in March; more than 200 other Chinese

producers have either gone bankrupt or merged

– Dozens of US solar companies, have gone under – some despite enormous subsidies, grants, tax

credits

• Solyndra, Abound Solar, Beacon, just to name a few

• Global failure of solar panels as cost-cutting measures lower quality– Chinese-manufactured panels showing highest failure rate (up to 20%)

– Meteocontrol found 80% of 30,000 installations reviewed in Europe were underperforming

– Arizona’s First Solar budgeted $271.2 million to replace defective modules it manufactured in 2008

and 2009

– Colorado’s Abound Solar bankruptcy filings say they knew about bad panels

– A solar power plant in California malfunctioned in just 2 years

MYTH: Georgia Power is a monopoly

• 41 EMCs (consumer-owned)

– Serve 3.9 million residents across

73% of the state in 157 of 159

counties

• 52 utilities owned by

municipalities

• 2 public utilities– Georgia Power (serves 2 million residents)

– Savannah Electric & Power

Source: Georgia Public Service Commission

Several offer solar power, including• Cobb EMC – Azalea

• Ga Power – Simon Solar & Solar Design &

Development

FACT: Georgians get their electricity from almost 100 sources

FACT: Electric utilities are heavily regulated, giving up their free market right

to set prices and profits in exchange for territories

MYTH: Deregulating the power industry (aka “retail

choice”) would reduce costs

FACT: Texans have paid an extra $10.4 billion in above-average electricity

rates during deregulation

Source: http://www.texasobserver.org/report-electricity-deregulation-cost-texans-billions/

Map of US residential electricity rates

AK

HI

Top 10 highest

Top 10 lowest

Higher than GA

Lower than GA

GA plus = to GA

7.87₵

8.28₵

8.58₵

8.96₵

8.96₵

9.02₵

9.11₵

9.20₵

9.32₵

9.35₵

11.05₵

14.76₵

15.38₵

18.26₵

34.68₵11.09₵

10.17₵

9.98₵

11.51₵

11.05₵

10.26₵

10.64₵

17.62₵

SE states with lower cost

than GA tend to use

more coal

Source: US Energy Information Administration – 2011 Total Electric Industry

Georgia’s residential electricity rates are

lower than the national average

• Residential electricity rates in cents per kilowatt hour

– National average in 2011 (latest figures available): 11.72₵

– Georgia: 11.05₵ (mix mostly coal, nat gas and nuclear)

– Top 10 lowest rate states: <9.35₵

• Rely heavily on coal and hydro

• 6 have no RPS and 3 have voluntary RPS

– Top 10 highest rate states: >14.67₵

• Use virtually no coal

• 9 have mandatory RPS

Source: US Energy Information Administration

GA HB 657

• Rationale: Georgians want solar but can't do so because they don't

have a place to install it, can't afford the cost of installation, can't

own or purchase it

• Fact:

– It is not the government’s role to “help” people buy products they

can’t afford

– Solar energy is available from some utilities, and if it makes financial

sense and the PSC approves, others can provide it

• HB 657 is not needed

– Imagine this logic applied in another fashion

• Reducing traffic congestion is in the public interest

• A helicopter would allow me to avoid the interstates

• I can’t afford a helicopter or landing pad

• Gov’t should force Delta to provide me with a helicopter or helicopter service

GA HB 657

Provisions:

• Requires the PSC to certify a solar provider by 12/1/14

• Allows up to $600K/yr for cost of special services, to be recovered from

ratepayers or utilities

• Requires the PSC to determine the long-term impact on retail electric rates by

7/1/15

Fact:

• Only the government would spend money BEFORE knowing the impact on

consumers

• The cost of special services will undoubtedly leak back to consumers

• If solar were so cost-effective, all the utilities would be beating down the doors to

get access to it; no need to be “forced” by government to buy it

MYTH: HB 657 will eliminate utility monopolies

• Fact: HB 657 creates a solar monopoly

• From former PSC member Bobby Baker:

“Sometimes legislation is visionary and sometimes it is timely, but rarely is legislation as

antiquated and anti-competitive as is the case with HB 657. This proposed

legislation will authorize the Georgia Public Service Commission (PSC) to select a “community

solar provider” to be the sole developer of solar generation facilities throughout Georgia. Rather

than eliminating existing regulatory and legislative barriers to developing competitive renewable

energy generation in Georgia, HB 657 would create a new regulatory framework where the PSC

would select and regulate one company to develop large scale solar power projects. The selection

of only one community solar provider will mean the company selected will become the de facto

monopoly solar provider in Georgia.

Read more: http://gareport.com/blog/2013/03/27/hb-657-georgias-solar-monopoly-bill/

MYTH: HB 657 brings “free market” choices for

solar

• Provision: Sets long-term targets for solar capacity, including

minimum amounts that utilities must purchase from solar

• Fact: This is a "renewable energy standard" (RES) or

"renewable portfolio standard (RPS)

– 22 of the 29 states that have RPS requirements are considering

bills to roll back those requirements

– RPS drives residential costs higher

2001 2010

Coal-dependent non-RPS states 7.20₵ 8.95₵

RPS states 7.98₵ 12.31₵

Residential cost per kilowatt hour

“Lipstick on a Pig”

• From GA Pundit:

“State Rep. Rusty Kidd and several others unveiled a repackaged

version of the failed Georgia Solar Utility legislation that the General

Assembly rightly rejected. It's called House Bill 657. I'm

disappointed that State Rep Buzz Brockway has sponsored this

heavy-handed legislation that takes everything contained in a bad

bill, slaps the word "Rural" on it, adds some more big-government

nanny state language and pretends that the legislature can say

something will not cost consumers more by waving their magic wand

and saying it won't cost more. Make no mistake: this is Obama-style

legislation and just like Solyndra, it will cost Georgians millions of

dollars. Lipstick on a pig.”

The Left sprinkles conservative terms to

trick us into accepting their premises

MONOPOLY

fre

e

ma

rke

tsEnergy Independence

C

h

o

i

c

e

competition

Elim

inating

subsid

ies

Take Action!

• Don’t be a “low-information” energy voter

• Oppose HB 657

• Let the media and your state representatives know of your

opposition

• Keep electricity reliable, efficient and affordable in Georgia!