Solar Subsidies Sink State

Taxpayer grants and mandates for alternative energy undermine Pennsylvania economy

SEPTEMBER 1, 2010 | News Release by COMMONWEALTH FOUNDATION

Solar Subsidies Sink State

Harrisburg, PA - The Commonwealth Foundation expresses its displeasure with Gov. Rendell's pronouncement today of awarding more taxpayer funds for solar energy projects and advocating an increase in a mandate to buy more solar energy.

"Gov. Rendell is clearly trying to pick and choose his favored special interests," said Matt Brouillette, President and CEO of the Commonwealth Foundation. "At the same time he is demanding subsidies and regulations to benefit his friends in the solar industry, he is calling for a tax on the natural gas industry which is producing affordable, reliable energy and creating thousands of jobs-without government subsidies."

The administration is suggesting solar energy grants and mandates will benefit consumers.  Yet solar energy is among the most expensive types of electricity, when accounting for construction and maintenance.  The Pennsylvania Utility Commission's recent report on the status of Alternative Electricity Portfolio Standards found solar energy is actually getting more expensive, and remains several times more expensive than electricity from coal or natural gas.

Total Cost of Ownership for Electricity Generation by Source (cents/kWh)
Source 2007 2009 Change Percent of PA Electric Price (2009)
Solar PV 41.2 67.8 65% 706%
Wind 7.5 14.4 92% 150%
Scrubbed Coal 5.7 9.4 65% 98%
Natural Gas/Oil 7.2 5.8 -19% 60%
Natural Gas/Oil Advanced 6.8 5.5 -19% 57%

PA Average Electricity Price 9.0 9.6 7%
Sources: Pennsylvania Utility Commission, AEPS Annual Reports, http://www.puc.state.pa.us; Energy Information Administration Back Issues: Electric Sales, Revenue, and Price; EIA Electric Power Monthly, http://www.eia.doe.gov

States with binding renewable portfolio standards, like Pennsylvania, have electricity rates that are nearly 40% higher than states without mandates.

"Gov. Rendell's greed is behind the idea that we take from the productive sector of our economy to fund an unproductive industry," added Brouillette.  "Pennsylvania has had alternative energy mandates in place for six years, and state taxpayers have given billions to alternative energy companies, and the result are higher electric rates and ‘creating green jobs' while our overall employment plummets."

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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.



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