It Costs You a Fortune For Obama To Be Green

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Although climate change ranks close to the bottom of Americans' concerns, well below jobs and the economy, President Barack Obama is proposing a new set of solar energy policies that he describes as "good for job growth and good for our economy."

President Obama has described 2014 as a Year of Action. "Wherever I can go ahead and create my own opportunities for new jobs, I'm going to take it," he declared earlier this month in Mountain View, California. He praised companies such as Walmart that have installed solar panels, and banks such as Citibank and Connecticut's Green Bank that have invested in renewables.

But these companies might grow faster if they use or invest in natural gas instead of solar. Solar energy produces a small fraction of one percent of America's electricity and costs almost twice as much to produce as natural gas, according to the Energy Information Administration. If the 27 percent of U.S. electricity generated by natural gas came instead from solar power, consumer costs for monthly electric bills would increase about 25 percent.

Mr. Obama mistakenly believes that he can increase employment by tightening energy efficiency standards for equipment and multifamily homes, and training more people to work in the solar power industry. But America does not need another green jobs training program, training people in expensive technology that few use.

The Labor Department reports that only 4,130 people were employed as solar photovoltaic installers in May, 2013, the latest data available. These workers earned a median annual wage of $39,600. Only 50 employees worked on electric power generation, transmission and distribution-one hundredth of a percent of total employment in this industry.

Nevertheless, the White House announced that the Energy Department's Solar Instructor Training Network "will support training programs at community colleges across the country that will assist 50,000 workers to enter the solar industry by 2020." They will join 22,000 people trained since 2010. No wonder unemployment remains high.

Mr. Obama did not mention that he could immediately create about 20,000 jobs and many indirect ones if he approved Keystone XL, the pipeline that TransCanada wants to build from Canada to the United States. Canadian heavy crude, blended with North Dakota light crude, is processed in refineries in Texas and Louisiana. About 11 million Americans are employed directly or indirectly in the oil and gas industry.

Central to the President's climate philosophy is the belief that forcing businesses to rely more on solar energy and to increase their energy efficiency will save money and allow businesses to hire more workers-together jumpstarting the economy. These assumptions rest on dubious economics.

The White House reports that "National Housing Trust, an innovative affordable housing developer and owner, will install 400 kW of solar PV and 15,000 therms of solar thermal this year." National Housing Trust is joined by GRID Alternatives, WinnCompanies, and two dozen more companies that are currying favor with the administration by pledging to use solar energy.

If you are WinnCompanies, or Black Rock Solar, or Global Green USA, and the administration calls to respond "to the President's call to action on solar development," as the White House Fact Sheet states, it is difficult to refuse, even if you know that your company is making utilities less affordable for residents of affordable housing.

For power plants entering service in 2019, energy produced by natural gas can be produced for $66 per megawatt hour, compared with $130 an hour for solar PV2. If residents of the housing complexes are not picking up the tab for expensive solar power, then taxpayers are bearing the burden. Either way, more money spent on solar-generate electricity means less money spent on groceries, clothes, transportation, and entertainment.

These costly measures ignore America's declining share of global greenhouse gases-16 percent and falling-and the growth of fossil fuel use in emerging economies such as China and India. These countries have no intention of controlling their greenhouse gas emissions, because they want their incomes to catch up to Western levels.

Training people for nonexistent jobs and browbeating companies into investing in more costly forms of energy is no way to stimulate economic growth and create jobs. If Mr. Obama wants to pander to his environmental base, there must be some cheaper way.


Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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