Letter: Let renewables compete
A recent column in The Detroit News (“Clean energy makes economic sense,” April 11), is another attempt to promote the fiction that renewable energy is as economical as other energy options. If that’s true, we shouldn’t need to subsidize renewables. But we do.
These advantages include direct subsidies, like the federal production tax credit handed out to big wind and solar developers each time they install new wind turbines or solar panels. They also include protective mandates, like Michigan’s renewable portfolio standard, which forces renewables into the market ahead of other sources.
Until all of the special favors that help this politically favored industry are removed, all claims that renewables are cost competitive are nothing more than greenwash.
Prominent investor Warren Buffet understood what it takes to get wind farms built, stating subsidies and tax credits were “the only reason to build them.” He continued, “They don’t make sense without the tax credit.”
The renewable energy industry also appears to recognize this fact. When its generous handouts are threatened, the entire industry goes into shutdown mode, threatening to lay off thousands and cease building turbines and solar arrays. This happened in 2012 and in 2015, when Congress considered letting the production tax credit expire.
In its report “Levelized Cost of Energy Analysis,” the financial advisory firm Lazard says it costs $32 to $62 per megawatt hour to install wind power. It puts the cost of large-scale solar power between $46 and $61 per megawatt hour. These numbers are different — and significantly lower — than the ones in the Michigan Public Service Commission’s 2017 annual report on Michigan’s renewable energy mandate. Many of the current wind and solar contracts in Michigan are at $90 or $100 per megawatt —even as high as $160/MWh.
Again, if the renewable industry is as competitive as its proponents claim, why are Michiganders paying so much more than the rates Lazard has published?
We can still have the policy discussion about whether the environmental benefits of renewable energy make it worth the additional cost to build. But, until renewable energy can actually compete in Michigan’s markets – on a fair and level playing field – let’s stop pretending it is cost competitive.
Jason Hayes, director of environmental policy, Mackinac Center for Public Policy