RALEIGH— John Morrison, chief operating officer of Strata Solar in Chapel Hill, on Wednesday was lauding the brisk growth of sun-powered electricity in North Carolina in comments to the North Carolina Energy Policy Council. His company has built solar farm and solar array projects across North Carolina with a total value, including labor and material, of $1 billion.
“The market is just going gangbusters,” Morrison said. Strata Solar’s investors “are asking us for more projects than we can build.”
But N.C. State University professor Herbert Eckerlin says the sunny stories of solar energy’s economic benefits are wildly exaggerated, while the higher costs and technological challenges are deliberately downplayed.
“Due to solar power, the cost of electricity is going to increase for industry and residential” customers, hindering job creation, said Eckerlin, who described himself to the council as “a strong proponent of solar and renewable energy.”
Eckerlin, a former official with Dominion Power in Virginia, designed and built the NCSU Solar House on the N.C. State campus, founded the North Carolina Solar Center, and is a member and former treasurer of the North Carolina Sustainable Energy Association, the statewide marketing arm of the renewable industry.
“We’re creating millionaires — the investors who benefit from the tax breaks” offered by the state and federal governments, Eckerlin told the council. The way the deals are structured, he said, citing a U.S. Department of Agriculture publication, “creates a scenario where very little or no developer cash is needed” to get rich.
“What you’re doing is supporting a government-created industry and putting it on the backs of the taxpayers, because the subsidies make it good for the investors with tax breaks, but somebody’s got to make up for it,” Eckerlin said.
“A solar developer has very little skin in the game. It’s awfully important for the people of North Carolina, for the industry of North Carolina, for the taxpayers to understand that,” Eckerlin said. “I’m not saying the technology is not good and shouldn’t be done, but exactly how we pay for it is important.”
Morrison countered that “all sources of energy have incentives,” so it’s important not to focus on the incentives any one sector of the energy industry receives.
“What would the price of alternative energy have to be if you had no tax credit?” council member Frank Gorham asked.
It would be “hard to calculate that exactly,” Morrison said.
Further, he said, an RTI/La Capra economic analysis determined that every $1 spent on state tax credits for solar energy generates $1.87 in return on investment.
There is a “really important economic opportunity” for landowners to lease property to site solar farms, and the supply chain grows, he said. As an example he cited a fence company that works on solar farms went from four to more than 40 employees, and is now the fourth-largest fencing company in North Carolina.
But Eckerlin said landowners only receive “a pittance” for use of their land.
And in a review of the RTI/La Capra study, Beacon Hill researchers concluded the results “are mismeasured and spurious. Orthodox cost-benefit analysis will not find anything like what the report’s authors estimate,” the reviewers said.
North Carolina’s Renewable Energy Portfolio Standards require utilities to use ever-increasing volumes of renewable energy, reaching 12.5 percent of the electric mix by 2021. But the Beacon Hill analysis concluded most of the savings observed to date stem from mandated energy-efficiency programs in government buildings and building code requirements rather than the use of green energy itself.
The North Carolina Sustainable Energy Association attempted to quantify the impact of nine clean energy sectors on the economies of North Carolina and neighboring states by determining the number of clean energy jobs created and the gross clean energy revenue generated.
Eckerlin said his review concluded the ratios of that data were $194,000 in revenue per clean energy job created in North Carolina, $268,000 in Georgia, and $81,000 in Virginia.
“The numbers to me make no sense at all, and cannot be taken seriously,” he said, variously calling them “delusion,” “bogus,” and “absurd.”
Yet that is the sort of data that is given to legislators and the public, “and they’re in no position to make judgments on this,” so they generally accept it at face value, Eckerlin said.
An independent party that has no vested interest in the outcome should conduct such surveys, he said.
“The thing that’s most disturbing to me is the misinformation that’s out there in the media,” Eckerlin said. “I don’t know if the media is in the tank, or they just are uninformed.”
He bristled at media reports suggesting a 500-megawatt solar farm could replace a nuclear power plant. The largest solar farm is only 377mw, and nuclear plants can be up to 5,000 mw.
“When [reports] talk about a solar farm powering 1,250 homes, and not a mention of intermittency in educating the public, we’ve got a problem,” Eckerlin said. Intermittency means that solar power requires specific conditions — namely, full exposure to sun — for panels to collect energy. This energy can be interrupted during cloudy days and rainy weather. Because solar power is not reliable, it requires backup systems, and utilities are forced into that role, Eckerlin said.
Ratepayers, industrial/commercial customers, and taxpayers all pay more for the higher system and operating costs associated with the redundancy of dual power systems, he said.
“I don’t know where the electric utilities are, and they’re not speaking to me” about that issue, and many others, Eckerlin said. “But when the cloud comes over and they have to respond to the drop in solar energy, that’s got to be a problem.”
Gary Freeman, director of renewable energy compliance and origination for Duke Energy, told the council that the utility is seeking to solve issues with integrating and operating the rising number of solar facilities on the Duke system. Solar power generation peaks too early in summer and too late in winter to meet peak customer demand, he said.
However, he said, Duke “supports a portfolio of cost-effective solar resources [that] will play an even more important part” in its electric generation fleet in the future.
Morrison believes solar power could be interconnected on the grid “in a very cost-effective way” just as nuclear power was linked up 50 years ago. He said that would require regulatory changes, and revisions to current financial mechanisms that are a disincentive to both utilities and solar providers.
Eckerlin said the council should consider several recommendations, including committing more research funding to solving the problem of intermittent solar power and spending less on solar farm incentives.
“Write new legislation on the solar farm process that makes it public information for all to see and understand. I struggle to get information. People have to tell me things in confidence,” Eckerlin said. “That’s crazy, but that’s the way it is. Duke doesn’t talk about it, John Morrison can’t talk about it.”
New legislation also is needed to shift the costs of solar projects from taxpayers to solar developers, he said. And an educational program should be launched to inform legislators, industrial leaders, the media, and the general public on the potential and limitations of clean energy technology.
Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.