Solar Energy – Equivalent to a 4% Nevada State Income Tax
The Nevada renewable energy quota law, requiring 50% renewable electricity by 2030, will result in building about $14 billion worth of new solar plants that would supply $2 billion worth of electricity every year. The $2 billion would mostly be passed on to Nevada residents. The $2 billion spread across an assumed 870,000 Nevada households in 2030 would be a cost of more than $2000 per year. This is roughly equivalent to imposing a 4% state income tax.
In contrast, if we simply build new natural gas plants as needed, the cost of electricity will decline because the percentage of renewables in the mix will decline.
Increasing renewable energy will accomplish exactly nothing. It will very slightly reduce CO2 emissions, but CO2 emissions are much greater in China and India than in the United states and increasing very fast. U.S. emission have been declining due to increased use of natural gas. Increased renewables will have negligible effect on air pollution because natural gas that we currently use burns extremely clean. Expanding the use of renewable solar energy is utterly useless and stupid.
So, why is this happening? Because special interests that make money from solar energy have captured our state government. With massive propaganda and campaign contributions they have fooled us into supporting renewable energy boondoggles.
Calculation Unsubsidized Cost of Electricity Gemini Project
The Gemini project is a project under development north of Las Vegas. It has a 690 MW bifacial, single axis tracking solar array. There is a 1406 MWh battery that is used to move power from the afternoon to the evening. That battery can source power for 3.7 hours. Solar with storage becomes a necessity once the amount of solar increases above the amount that can be handled in the daytime. The spreadsheet below supports a cost (without subsidies) of $160 per megawatt hour.
The Gemini project is a model for future solar in Nevada because it has battery storage, a necessity for further solar expansion to move solar electricity into peak evening-late afternoon hours.
In order to reach the 50% renewables by 2030 the cost for solar is as follows.
Currently Nevada uses about 40-million megawatt hours of electricity per year. 8-million is renewable. Population growth of 1.5% a year will increase demand to 46-million by 2030. We will need 23-million MWh of renewable electricity, an increase of 15-million. I assume this will be 80% solar, requiring 12-million MWh of new solar. At $160 per MWh this will cost $1.92 billion dollars each year. In 2030 the estimated number of households in Nevada will be 870,000. Spreading this cost over those households amounts to $2200 per household, each year. Although residential electricity is only a part of electricity usage, cost of electricity for business and government ultimately passes through to the residents.
Usage of electricity can be found at U.S. Energy Information Administration (EIA). Nevada population statistics easily googled.
The 4% state income tax equivalent comes from the median household income of $57,000:
2200/57000 = approximately 4%
Note: I assume that federal subsidies will be removed within the next few years. Currently the federal subsidy of a 30% tax credit is scheduled to phase down to 10% by 2020 and for rooftop solar be removed. The industry begged the congress to extend this subsidy but the congress declined, at least for this year.
The other major subsidy is a complicated tax subsidy called tax equity financing. I assume that this too will be phased out.
If Trump is reelected with a Republican congress it seems quite probable that the subsidies will be removed. But even with a Democratic house, the solar people have been left out in the cold.
Of course the federal subsidies just move the cost from Nevada electricity consumers to federal taxpayers.
Typically federal subsidies cover 75% of the cost. The renewable quota law is a state subsidy since, in practice, it forces a firm 25 year contract for the energy. That contract is golden - equivalent to a subsidy.