The Folly of Solar Energy

The late January brownout in central Minnesota, during a time of Arctic cold, showed that reliance on “green” energy can be life-threatening. Xcel Energy instructed customers to turn thermostats down to 60 degrees and refrain from using hot water. Xcel went so far as to put some customers up in hotels.

Investigation of the brownout has been informative. The principal problem, given that Minnesota has invested massively in wind energy, was that the wind wasn’t blowing. But there was another problem, too, which came out in testimony before the state’s Public Utilities Commission by an Xcel official. My colleague Isaac Orr explains:

During their testimony, Xcel Energy representatives stated that the company’s solar panels only produced 8 to 10 percent of their potential output because of snow cover.

Everyone understands, I suppose, that solar panels can’t produce electricity at night–which, coincidentally, is when we need to turn lights on. It is less well recognized that in the North, solar panels are also more or less useless during the Winter. But, you may ask, can’t they be cleared off and thus made functional?

Xcel Energy posted a profit of $1.1 billion in 2017, and you’re telling me they can’t pay a high-schooler to scrape off their solar panels for a little extra cash?
To me, the fact Xcel didn’t bother to clear the snow off their solar panels suggests they didn’t think it was worth it, from a cost/benefit standpoint.

I suspect that is exactly right. Utilities know that solar energy is a joke. So, why do they lobby for legislation requiring them to build ever more solar farms?

Yet, Xcel wants to build more solar because they get a guaranteed 7.5 percent profit on every dollar they spend on power plants, including solar panels, whether they produce electricity or not.

Some naive observers assume that the fact that utilities lobby to be required to build wind and solar facilities means they must be a good idea. On the contrary: if they were a good idea, utilities wouldn’t have to lobby to be forced to construct them.

It is all about the rate base. Any capital expenditure that goes into a utility’s rate base provides a guaranteed return. Whether the expenditure makes any sense in terms of providing reliable energy is another matter altogether.

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