Solar: Government, Business Waste (four GA case studies)

By James Rust -- March 23, 2015

“All solar power plants examined in this study show electricity costs two or more times conventional sources of ‘reliable’ electricity provided by coal, natural gas, or nuclear power. Overly enthusiastic promotions of solar energy by government officials, environmental groups, and those selling solar energy has led to grievous losses to taxpayers in the Southeast.”

A recent report by the Taxpayers Protection Alliance (TPA), “Filling the Solar Sinkhole: Billions of Bucks Have Delivered Too Little Bang,” found:

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. 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.  Solar energy remains prohibitively expensive – often three times more than electricity produced from natural gas or other sources.  As a result, less than 1 percent of the electricity consumers by Americans comes from solar energy sources.

Also in February 2015, the Department of Agriculture issued a press release, “USDA Announces Funding for Renewable Energy and Energy Efficiency Projects,” advertised $280 million from the 2014 Farm Bill for their Rural Energy for Americans Program (REAP).

REAP’s programs “support clean energy and reduce carbon pollution”.  In the report was the following paragraph:

Since 2009, USDA has awarded $545 million for more than 8,800 REAP projects nationwide. This includes $361 million in REAP grants and loans for more than 2,900 renewable energy systems. When fully operational, these systems are expected to generate more than 6 billion kilowatt hours annually – enough to power more than 5.5 million homes for a year.

This paragraph made the startling claim that rural homes use 1100 kilowatt-hours per year, which is utter nonsense because the average home in the U. S. uses 10,000 kilowatt-hours per year. In addition it would require 4 million kilowatts of solar panels to generate 6 billion kilowatt-hours annually that would cost possibly 12 billion dollars.

Looking for an Answer

At the end of their news release USDA mentioned if you had any questions visit their Ask the Expert page. So on February 10, the day of the press release, I sent in questions for clarifying the REAP annual energy output. I received a response I would have an answer in three to five business days.

With no response by February 19, I repeated the questions to Ask the Expert–and received another three-to-five-business-day promise.  Still no response, and I called the contact person for the news release and he said he would direct my question to the proper individuals. As of March 17, I have received no response.

This is one example of tax dollars being spent to promote solar energy and bogus numbers given by the federal government for performance.

Solar Hype vs. Reality

Taxpayer-funded solar projects are announced with great fanfare and then sink into obscurity as they are no longer subject to media scrutiny.  This paper provides costs and performance data for four recent taxpayer-funded solar projects in the Southeast—Hillsborough County Courthouse in Tampa, FL; Laredo Bus Maintenance Facility in Decatur, GA; Dublin School Board Facility in Dublin, GA: and University of Georgia Solar Demonstration Project in Athens, GA.

Solar energy prospects are not the same across the United States.  The U. S. Department of Energy (DOE) publishes solar energy potentials which give maximum output for a one square foot solar panel in watt-hours/square-foot/year.  For desert areas in CA, AZ, and NV, the potential is 610; while in FL and GA the potential is 460.  This means solar panels in FL or GA would have three -quarters the number of annual kilowatt-hours as in western deserts.

On January 30, 2015, Tampa Bay Times reporter Ivan Penn wrote:

“Florida utilities say solar doesn’t work in the Sunshine State, but it sure does in Georgia,” Mr. Penn wrote, “While Florida energy policy impedes solar power development, Georgia promotes it: The Peach State, with a population half that of its neighbor to the south, expects to reach 900 megawatts of solar power generation by the end of 2016, almost twice Florida’s projected total by that time.

“Georgia is going to wind up being a state that everyone looks toward,’”said Ken Johnson, a vice president and spokesman for the Solar Energy Industries Association in Washington, D.C. He said the reason why Georgia is emerging as a solar-power leader is that regulators and utilities have embraced solar as part of the solution for energy demand rather than rejecting it as not cost-effective.  Johnson said Georgia regulators are ‘proactive in trying to bring more solar without any upward pressure on rates.’”

A November 25, 2014, e-mail by the Georgia Chapter Sierra Club, “Georgia Named #1 Solar Market in the Nation,” reported:

Solar power is the fastest-growing clean energy technology in Georgia and is projected to increase by 535 percent over the next decade. It is also now more affordable than ever before, out-competing fossil fuel energy across the country. Last month, Georgia Power reported that 56 companies filed bids for over 5,000 megawatts worth of potential new projects, averaging less than 6.5 cents per kilowatt.”

As shown by the following stories, Georgia is becoming more susceptible to expensive solar projects than Florida.

Four Case Studies

1. HILLSBOROUGH COUNTY COURTHOUSE SOLAR PLANT

Performance of the Hillsborough County Courthouse is described in the July 30, 2014 paper by The Heartland Institute’s James Taylor “Solar Panels on Tampa Courthouse Fail to Meet Promises”.  The facility was built with America Recovery and Reinvestment (ARRA) funds and cost $1.2 million.  The facility is 196 kilowatts and was projected to save $60,000 per year.  In reality the savings are only $27,000 of electricity annually and with an expected lifetime of no more than 20-25 years, the savings are far short of facility cost.  The article provides a link to real-time operating data for the system which is a great education tool.  Real-time operating data should be required on the Internet for all large solar facilities funded with tax dollars.

Mr. Taylor writes, “In 2010, local politicians eagerly lined up for the news cameras to take credit for purportedly saving taxpayers money through the solar panels.  ‘I’d like to welcome and thank everybody who has come out this morning to help us celebrate Hillsborough County’s government going solar,’ said Hillsborough County Commissioner Kevin Beckner at an October 2010 press conference.  ‘It is so wonderful to see the Recovery Act at work in our community, creating jobs and saving money’ said U.S. Rep. Kathy Castor (D-Tampa).  ‘This is a nice initiative that will allow the county to put a little money back into the pockets of taxpayers at a time that they need it most, and to create jobs,’ said Castor.  ‘Hillsborough County is a great example of how the Energy Efficiency and Conservation Block Grant Program is being utilized across the country,’ said U.S. Department of Energy grant project office Jennifer Holman.  ‘The Energy Efficiency and Conservation Block Grant Program is one of the signature programs of the American Recovery and Reinvestment Act,’ said Holman.”

The solar panels were installed horizontally on the building roof.  For stationary panels, the optimum position to achieve maximum power output is for panels to face south and be tilted at an angle off horizontal equal to the latitude.  Tampa, FL is located 27 degrees north; thus the best positioning of the solar panels would have been facing south tilted off horizontal 27 degrees.  This positioning would have increased output approximately 15 percent.  Naturally installation costs would have been higher.  The return on investment (ROI) for this solar plant is zero.

2. LAREDO BUS FACILITY SOLAR PLANT

For a similar project in Georgia, we have 1.2 Megawatts of solar panels installed at the Metropolitan Atlanta Rapid Transit Authority’s (MARTA) Laredo Bus Facility in Decatur, GA.  This facility has 1.2 Megawatts of solar panels installed on bus canopies covering 190,000 square feet.

The cost of the project was $10.8 million and it was supposed to supply 1.2 million kilowatt-hours per year.  This project was also paid for with ARRA funds.  The solar panels were also installed horizontally instead of 33 degrees (the latitude of Decatur, GA) from horizontal facing south.  This means a loss of more than 15 percent of generating capability.

Operating data and maintenance problems are described in MARTA’s November 20, 2014 report “MARTA Sustainability Analysis”.  Excess electricity produced is sold back to Georgia Power Company.  For the period from August 1, 2013 to July 31, 2014, the report had a chart of monthly totals of electricity produced and paybacks to Georgia Power Company.  The annual results were the solar plant produced 1,438395 kilowatt-hours electricity and received $48,157.99 in paybacks from Georgia Power Company.  The report stated, “This chart does not show the savings of the electricity that the facility uses as a result of the canopy. The amount of electricity that exceeds the demand is sold back into the grid. It is estimated that the total monthly savings is $20-$25K per month. So the estimated annual savings can be estimated at $300K annually.”

The report further stated:

One of the challenges of sustainability is the commitment to a sustainable project that has an extended return on investment (ROI). The solar canopy, although funded by a Federal grant, generates roughly $300K per year for MARTA. The estimated ROI is 30 years. The Solar Canopy project has brought tremendous awareness about these types of efforts but some of the dangers are as follows. Suniva, the company that installed the Solar Canopy is now out of business drastically increasing the cost of support services and maintenance to keep the canopy working at top efficiency.

The inverters, which are necessary to convert the solar energy into usable electricity, are failing 4 years into the life of the canopies. The cost of replacement is $100,000 per inverter, the total cost of replacement estimates to about a million dollars. At this time, MARTA has no funding or plan that can cover the premature failure of these items. Although this provided a clean source of energy and actually produced in dollar terms, the technology is still new and needs time to develop further.

When operating, the Laredo solar plant’s output exceeded initial estimates of 1.2 million kilowatt-hours per year with a value of 1,438,395 kilowatt-hours for 2014.  This still does not have an annual value of $300,000 stated in MARTA’s report.  For Georgia,  USEIA rates for electricity in 2014 year-to-date  kilowatt-hours are 11.57 cents residential, 10.28 cents commercial, and 6.52 cents industrial.  Thus the value of electricity is approximately $150,000 which gives a return on investment (ROI) of zero.

3. DUBLIN SCHOOL DISTRICT SOLAR PLANT

Another area of investigation is the Dublin School District solar plant in Dublin, GA. A 1.08 Megawatt solar facility was built on the grounds of the local high school.  The school board signed a 25-year contract to pay the solar company that built the solar facility $300,000 per year for 25 years. The solar plant is financed by $3.6 million bond issue from the City of Dublin, which loaned the funds to Greenavations Power, LLC for construction of the solar plant.

Greenavations Power, LLC leases the facility to the Laurens County Public Facilities Authority which in turn subleases the facility to City of Dublin School District.  The solar company has access to the federal 30 percent tax credit for solar facilities, five-year accelerated depreciation, and the $7.5 million in payments over the 25-year period.  The school district is responsible for all taxes, insurance, and repairs on the solar facility.

A remarkable description of the history of solar energy in Dublin, GA is written by Benita Dodd, Vice-president of the Georgia Public Policy Foundation (GPPF), published March 17, 2015 titled “Cronyism vs. Kids:  High School Solar in Georgia ($7.5 million for $3.5 million)” which covers the period from 2010 to present.

A German renewable energy company located its American subsidiary Mage Solar USA in Dublin, GA after entreaties by Georgia Governor Sonny Perdue who is shown wearing a green jacket in the official ribbon-cutting ceremony September 22, 2010.  GPPF reported:

Mage was persuaded with a $1.25 million OneGeorgia EDGE grant in December 2010, and ‘committed to create 350 jobs and to spur the investment of capital in the amount of $25 million within 60 months.’ The total potential value of state incentives (including job tax credits, port tax credits, sales and use tax exemptions, QuickStart training and the EDGE grant) was estimated at $12,444,500, according to the Department of Economic Development.

Mage Solar was contracted by Greenavations Power, LLC for construction of the Dublin School District solar plant.  GPPF investigations showed, “At the same time, Greenavations, which was paid by the county, has yet to pay Mage for the panels installed at the school. Mage is suing Greenavations and Robert Green in Laurens Superior Court for nearly $1.4 million.”  “Today – less than five years later – Mage’s Dublin facility is shuttered. Its parking lot is deserted, a promised solar academy shut down, too.”

Numerous times the Dublin School System was contacted for operating data, maintenance problems, and insurance costs starting January 29, 2015.  My e-mail address was provided and no reply given to these requests.  However, on June 12, 2014 the Macon NBC affiliate 41 WMGT interviewed Michelle Thubin with Dublin City Schools.

The interview contained this information, “We’re already seeing some changes on our checks for sure,” Michelle Thublin with Dublin City Schools said.  Dublin City Schools turned on the power to the 4,000 solar panels at Dublin High School six months ago. Thublin said in that amount of time, they are already seeing savings.  “We got our power bill back from this May and then we compared it to last May,” she said. “Last May it was about $18,000 and then this year, our power bill has dropped to $3,600.”

The apparent savings on the power bill is $18,000 – $3,600 = $14,400. However, the school system paid $25,000 for that month’s electricity; thus their power bill for May 2014 was $28,600.  The GPPF article reported:

“No numbers have been published yet for the total 2014 energy bill, but the superintendent of Dublin City Schools, Dr. Chuck Ledbetter, told the Georgia Public Policy Foundation the high school saved $87,000 on its 2014 energy bill.”  “We’re pleased with what it’s doing,” Ledbetter said. “It’s right about where we thought it would be.”  This result explains the Dublin School Board’s failure to provide operating data.  One could speculate what type of mathematical analysis could show a profit from this 25-year lease agreement.  Perhaps Dublin students are being shortchanged in their education.

Showing the solar industries reward for those promoting dubious solar projects, Dublin City Schools Superintendent Dr. Chuck Ledbetter accepted The Solar Foundation’s K-12 Schools Award for his outstanding dedication to install more than a megawatt of solar energy at Dublin High School. Specifically, the DHS solar panels were chosen for saving the entire school district significant costs over the life of the project. No saving will take place and the school system will be stuck with a broken down solar plant after 25 years.  Again the return on investment is zero.

4. UNIVERSITY OF GEORGIA SOLAR DEMONSTATION PROJECT

Giving into demands by students, facility, and staff, the University of Georgia in Athens, GA agreed to place a Solar Demonstration Project on one of their campus building. The unit was estimated to have an annual output of 30,000 kilowatt-hours and an approximate construction cost of $60,000. Mage Solar was contracted in 2012 to supply solar panels which were placed on the Jackson Street Building of the new College of Environment and Design with a maximum power output of 19 kilowatts. Private communications with the University of Georgia said the materials cost for the solar panels was $46,000; thus a $60,000 cost for the system seems reasonable.

Operating data for the year 2014 showed a total energy output of 11,732 kilowatt-hours—about one-third the projected value.  This was to be expected because the original estimated output is too optimistic for solar plants located in Georgia.  In addition, observing the placement of the solar panels on the Jackson Street Building shows they are at too steep an angle for locations at the latitude of 33 degrees for Athens, GA.

This degrades system performance in the summer when solar output is at its peak.  The USEIA 2014 year-to-date commercial rate for Georgia is 10.28 cents per kilowatt-hour for electricity.  Thus the annual value of electricity for the Georgia Solar Demonstration Project is less than $1250 which means this facility will not pay for itself before it is no longer functional in 25 years.  Once again the return on investment is zero.

Conclusion

All solar power plants examined in this study show electricity costs two or more times conventional sources of “reliable” electricity provided by coal, natural gas, or nuclear power. Overly enthusiastic promotions of solar energy by government officials, environmental groups, and those selling solar energy has led to grievous losses to taxpayers in the Southeast.

———————————-

James H. Rust, Professor of nuclear engineering and policy advisor The Heartland Institute