As solar energy becomes more attractive to Utah residents, one organization says subsidy programs are misleading.
The solar energy industry has been booming thanks to solar tax deductions. These deductions were expected to expire, but were recently renewed by congress through December 2019.
Solar energy use in the United States has been around since the 1970s. Growth and interest in solar energy took off in Utah over the last five years, but the amount of homes with solar energy is still inconsequential, says Utah Clean Energy’s executive director, Sarah Wright.
“We’re still at only about .5 percent of homes in Utah have solar. Even though we’re starting to see it on our neighbors and it’s becoming more commonplace it’s still a very low percentage of our energy resource."
Cost is one part of the reason solar energy is used by a small percentage of Utahns. Many individual homeowners are paying tens of thousands of dollars to improve their home’s energy efficiency. Wright says the cost has decreased by 75 percent over the last five years and will continue to decline.
Logan municipal councilman Herm Olsen had 17 solar panels installed on his home. He says it is a small step in solving a much bigger problem.
“We can’t sustain electrical generation through coal fired power plants into the indefinite future," Olsen said. "It’s poisoning our planet and I just wanted to make a statement that says in my little corner of the world I will do what I can to put solar panels on my house.”
Growth and interest in solar energy took off in Utah over the last five years.
Some Utah cities give residents an opportunity to participate in solar rebate programs or solar consortiums. The former helps purchase shares from a community solar farm while the latter groups residents together to decrease rates on solar panels. Logan city Mayor Craig Petersen said just one year ago, Logan's community solar farm only had 80 solar panels, but the number has since tripled, to 240. The amount of homeowners purchasing solar for their own home, part of the Cache Clean Air Consortium, is also increasing: 52 homeowners have installed solar panels in Cache County.
"I’m guessing that we’ll continue to have additional solar installations, maybe a lot of people that are inclined to do it have already done it so that the rate of growth may slow, but it depends," Petersen said. "It depends really on prices as the cost of panels declines then the alternative becomes more and more attractive."
Petersen said he put solar panels on his own home in October 2014 to play a role in informing the public about the benefits of alternative energy. Residential tax credits were also a significant factor in his decision to go solar, he said.
People who install solar panels on their homes can claim up to a 30 percent residential tax deduction, said Leslie Paige, the VP for Citizens Against Government Waste, a nonprofit organization that investigates government spending. The issue with the tax credits is billions of dollars are foregone to the U.S. Treasury. Paige said another issue with solar incentives is solar companies are benefiting from renting out solar panels to users.
People keep talking about the importance of renewable energy, but solar energy is only a small margin of the energy resources that contribute to our daily lives.
"Essentially the resident himself or herself is not purchasing it outright," Paige said. "They are leasing it from a solar company and the company itself is actually benefiting from the percent from the tax credit."
Paige said people keep talking about the importance of renewable energy, but solar energy is only a small margin of the energy resources that contribute to our daily lives. It is almost nonexistent.
"Yet the amount of money taxpayers at the federal and state level gives them is just huge in comparison to what it produces," she said.
CAGW’s December 2015 report explored the possibility of tax credits being a wasteful energy subsidy and questions whether the promises of job creation in the solar industry are being met and whether the subsidies skew energy investments away from solar energy. The report says the U.S. needs to stop funding these programs that are contributing very little to the energy grid, ending on the following note:
"The least Congress can do is lower the boom on an up-front subsidy like the ITC (Investment Tax Credit). Like the wind PTC (Production Tax Credit), it has yet to deliver on promises that it will help to foster a sustainable, reliable, credible component of the U.S. energy portfolio. Indeed, it will not be clear that the power of the sun is viable in helping to power America’s homes and businesses until its federal purse strings are severed, setting free the solar industry and taxpayers."
But Utah continues to commend solar energy. In April 2015, President Obama announced his goal to train 75,000 workers in solar energy jobs by 2020. He says this will open up more jobs and provide more incentive to invest in solar energy.
"I think everyone has different reasons for investing in solar," said Wright from Utah Clean Energy. "It’s part of a diverse energy system. There’s no pollution so it has benefits to our air quality. It also provides, even if it’s a little bit more expensive now which is getting pretty close to right in line with our energy rates, it provides affordable stable cost energy and some people like the resiliency."
Wright said solar energy, along with wind and geothermal energy will allow Utah to develop a cleaner, more diversified energy system. Though she said it’s not a reality for solar energy to be the sole energy provider in Utah, it will have a bigger role to play in the future.
