Report: Solar Energy Subsidies Cost $39 Billion Per Year

Solar makes up only 0.6 percent of total U.S. electricity generation

An auction sign outside the headquarters of Solyndra, which declared bankruptcy in 2011. / AP
February 12, 2015

Despite billions spent in investments over decades, solar energy will only make up 0.6 percent of total electricity generation in the United States, according to a report released by the Taxpayers Protection Alliance (TPA).

"In spite of government’s best efforts to encourage innovation by solar energy companies and encourage Americans to rely more heavily on solar electricity, solar power continues to be a losing proposition," the report said. "American taxpayers spent an average of $39 billion a year over the past 5 years financing grants, subsidizing tax credits, guaranteeing loans, bailing out failed solar energy boondoggles and otherwise underwriting every idea under the sun to make solar energy cheaper and more popular. But none of it has worked."

Government support for the solar industry is vast, with at least 345 different federal initiatives that spread across 20 agencies, the report noted. The Pentagon has the highest number of solar programs, with 63, followed by the Interior Department, which oversees 37 programs. The Energy Department only manages 34 solar programs.

"This report is only the first step in asking the important questions about solar subsidies," said David Williams, the president of the TPA. "Taxpayers need to know the truth about where their dollars are being spent."

"Congress needs to stop these massive subsidies that are siphoning $39 billion a year from taxpayers," he said. "If solar is ever going to be a viable energy source and industry, they need to wean themselves off the public dole."

In addition to the federal government, which has spent $150 billion in the last five years, states also heavily subsidize the industry by offering tax breaks and 538 rebate programs.

However, solar energy will only contribute 0.6 percent of total U.S. electricity generation in 2015, the TPA’s report said.

Last month the Energy Department announced an additional $59 million for "solar deployment plans."

"The U.S. has installed more than 17 gigawatts of solar power—enough to power 3.5 million average American homes," the agency noted. Seventeen gigawatts is only enough to power 3.02 percent of the 115. 6 million households in the United States.

A majority of federal spending for solar power goes towards tax incentives, grants, and loan guarantees, the report said, including the Investment Tax Credit, which was used by Solyndra, and the Sunshot Initiative.

The Sunshot Initiative spends $270 million per year attempting to "induce companies to lower production and installation costs associated with photovoltaic solar panel systems and reducing the price of solar power," the report said.

The report concluded that the time has come for solar energy to prove its merits without billions in support from the federal government.

"After decades of massive ‘investments’ and disappointing results, it is time that Americans critically evaluate whether our faltering federal solar initiatives deserve continued support," the report said. "With so little to show for so many costly initiatives, it should be apparent to objective observers that federal solar power efforts have not been a productive or prudent use of precious tax dollars."

"Solar energy’s day in the sun may yet come, but taxpayers should not be forced to foot the cost associated with turning the failing industry around," it added. "Solar energy must be asked to stand on its own, powered exclusively by private investment and initiative."