Unless Legislature Embraces Free Market Energy Future, California Faces Next Solyndra

Unless Legislature Embraces Free Market Energy Future, California Faces Next Solyndra

California’s solar power system generated such a glut of electricity for two weeks in March that some of it had to be sent out of state. Supporters of solar energy might believe this is evidence that it works. But it actually highlights solar energy’s biggest flaw.

In late June, the Los Angeles Times reported that during that fortnight a few months ago, “Arizona utilities got a gift from California: free solar power,” and that the same thing “happened on eight days in January and nine in February as well.” It also reported that the power Arizona received was “actually better than free.”

“California produced so much solar power on those days that it paid Arizona to take excess electricity its residents weren’t using to avoid overloading its own power lines.”

This problem isn’t wholly unique to California, where only about 17 percent of the electric power is generated by renewables wind and solar according to the state Energy Commission. India has also had problems with generating too much solar and wind power that goes wasted.

The surplus power produced in California is truly more bug than feature. Sure, sunny spots across the state can generate vast amounts of electricity. But not at night. Because solar power has storage problems, it has to be used right away — or be shipped elsewhere in a non-market transaction in which there are clear winners and losers.

While, as the Times reported, “those transactions helped save Arizona electricity customers millions of dollars this year,” they are ultimately paid for by California consumers and taxpayers. The cost is forced onto nearly every household in California by elected officials who have bypassed market reality to pursue a political agenda by artificially rushing a technology rather than allowing the market to develop it. It’s the story of Solyndra, the Fremont company that was supposed to lead the solar power revolution. The government gambled heavily on Solyndra, but it burned through $535 million in taxpayer assistance, then died.

What happened with California’s excess supply in solar energy this year is an experience the state needs to remember as it considers legislation by Senate President pro Tem Kevin de León to require the state to be fully powered by renewable energy in 2045.

Current law requires that one-half of electricity come from renewables by 2030. Conventional fossil-fuel power generation — coal, natural gas — bought and sold in a free-market environment is typically cheaper, more efficient and doesn’t create the problems California had in January, February and March.

Supply responds to the demands of the market. Solar, however, doesn’t have the same flexibility. So if advancing technology is unable to build batteries and other storage systems capable of handling surplus solar and wind power that can be used when the sun isn’t shining and the wind isn’t blowing, then California’s energy future is likely to be a bitter, costly experience.

Yes, solar power costs are falling. And maybe by the time California’s renewable power deadline arrives, the storage problem will be settled. The Energy Collective reported in April that while “traditional batteries have not been up to the task … recent innovations in energy storage are rapidly resolving the issue.”

But will the innovations arrive on time? It’s impossible to predict, and solar’s questions remain unanswered. Researchers at the Université libre de Bruxelles found last year that even on a less-than-industrial scale, such as a home equipped with panels to catch the sun, solar “systems coupled with lead-acid batteries do not ensure electrical self-sufficiency for a residence at a reasonable cost.”

Meanwhile, industry magazine Spectrum says that taking a solar-paneled house off the grid would require the installation of “a voluminous and expensive assembly of lithium-ion batteries.” So there goes the garage. Or the backyard. Or the employee parking lot of a business or industry converting to solar.

Should the market resolve renewable energy’s shortcomings in the next 25 years, then California will be able to meet its goal. But policymakers should not rush the process with more subsidies, taxpayer-funded research and expensive bets made on politically favored projects that characteristically fail. At the dawn of the 21st century, Germany charged ahead with green energy initiatives and it is costing consumers there dearly. Fortune reported that the nation spent $26 billion on renewable energy in 2016, and all but about $2 billion of it was subsidized by consumers “through a surcharge on their electricity bills.”

“The rise in that surcharge is the single biggest reason that the amount the average German household spent on electricity rose to” about $1,200 in 2016, “up 50 percent from 2007.”

If California policymakers are capable of learning a lesson, they can get an education from Germany.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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