Solar Power: economically and environmentally unsound

October 24, 2011 by Amy
Filed under: Archive, New Energy Economy 

This column appeared originally in Townhall Finance.

Solar energy is neither economically nor environmentally sound

By Amy Oliver Cooke and Michael Sandoval

We live in the state that is ground zero for absurd energy policy, also known as the New Energy Economy.

In a recent Denver Post house editorial, Colorado’s self-described “newspaper of record” was downright giddy about General Electric’s announcement that it will manufacture thin-filmed photovoltaic (PV) solar panels in Aurora and employ 355 people.

GE, which could have financed the whole project itself, came to Colorado because of government provided taxpayer-funded “incentives.” Ironically, the industrial behemoth just announced $3.2 billion in net earnings for the third quarter, a 57 percent increase over last year.

The new solar panel manufacturer fits perfectly with Colorado’s economically unrealistic New Energy Economy and its fantasies of clean, domestic energy sources.

Solar panel manufacturer profiles

So far, Colorado companies have been unable to meet the promises made by proponents of the New Energy Economy.

Ascent Solar, a Colorado company and maker of copper-indium-gallium-selenide (CIGS) thin-film PV cells, had qualified for the due diligence phase of the Department of Energy loan guarantee program like the one awarded to Abound (they were applying for $275 million). But continued losses—$85 million in the first half of 2011 alone—provoked a business model adjustment switch to portable solar solutions that saw the company reduce its staff by half and withdraw its loan application, only finding refuge in Asian investors in August to prevent collapse.

In 2009, Ascent’s projected growth included hundreds of additional jobs, with then-Governor Bill Ritter (D) and both of Colorado’s U.S. Senators attending the opening of its reconfigured plant just outside Denver.

“Thanks to companies such as Ascent Solar, all across Colorado, we’re creating a sustainable energy future, sustainable opportunities for new businesses, and sustainable jobs,” said Ritter at the time.

Abound Solar is Colorado’s homegrown Cadmium Telluride (CdTe) solar panel manufacturer. With more than $400 million in taxpayer-funded loan guarantees and tax incentives, Abound employs roughly 350 people with plans for another 850 to 1000 employees in an Indiana facility sometime in 2012 or 2013.

GE’s entry into the Colorado market comes on the heels of its acquisition of Colorado-based PrimeStar Solar, culminating in plans to develop a $300 million project that promises those 355 jobs—at a cost of $28 million in municipal and state-based incentives.

What kind of solar panels will GE’s Colorado plant manufacture? Cadmium telluride, the same as Abound Solar, which the New York Times declared would put the loan guaranteed Abound—and by extension, taxpayers—“at risk.”

As we wrote previously, “Abound has a manufacturing capacity of 65 megawatts expanding to 850 megawatts – at some point. However, in 2010 it manufactured only 30 megawatts.” If it has the ability to produce more, then why doesn’t it? Perhaps it’s because the solar panel market is over-saturated, while demand and price have dropped dramatically.

Put aside the absurd economics for a moment, would all the taxpayer “investment” be money well spent if we could become “energy independent” while enjoying the benefits of “clean” renewable energy?

The myth of “energy independence”

All of these solar panel producers have something in common; they need raw materials, specifically rare earth minerals, to manufacture their products. The U.S. currently does little mining or processing of rare earths.

When the Denver Post fawned over the taxpayer-subsidized GE solar manufacturing plant coming to Colorado, it concluded with the typical appeal to “energy independence.”

But solar energy does not equate to “energy independence” because it relies upon other countries, namely China, for the necessary supply of rare earths. Late last year, the Department of Energy (DOE) acknowledged the problem and published a report titled “Critical Materials Strategies” which focused on rare earths used in the production of various “clean” technologies.

Current global materials markets pose several challenges to the growing clean energy economy. Lead times with respect to new mining operations are long (from 2–10 years). Thus, the supply response to scarcity may be slow, limiting production of technologies that depend on such mining operations or causing sharp price increases. In addition, production of some materials is at present heavily concentrated in one or a small number of countries. (More than 95% of current production capacity for rare earth metals is currently in China.) Concentration of production in any supplier creates risks for global markets and creates geopolitical dynamics with the potential to affect other strategic interests of the United States.

So the country that is challenging the U.S. economically and is the largest foreign holder of U.S. debt also controls the very materials needed to ensure our “energy independence.”

What’s funny is that the DOE suggests that the private market will respond, but it does not imply that an American-based market will respond. Rather the DOE suggests achieving “globally-diverse supplies” of rare earths. That hardly sounds like “energy independence.”

The Denver Post didn’t craft the argument that green energy will make us energy independent.  The newspaper is simply guilty of parroting what the leftist environmentalists have been trumpeting for years without challenge: we must break our dependence on “foreign oil” and embrace renewable energy.

Colorado State University’s Center for the New Energy Economy Director Bill Ritter advanced the argument last year as he was closing out his one term as Colorado Governor.

Over the past few years, we’ve established a clean-energy template that is creating thousands of new jobs, reducing our dependence on foreign oil, and generating innovative technologies for the future…The New Energy Economy in Colorado can serve as a pathway for all of America that will lead to greater economic, energy, and environmental security.

Which seems odd because Canada, our largest oil supplier, isn’t a hostile trading partner but China has proven it can be.  The global demand for rare earth minerals is projected to grow at eight percent annually, while China has kept the growth in supply near zero. Even worse, at times China has imposed embargoes on them to the West.

Popular Mechanics describes the danger of the Chinese monopoly on rare earths:

Mines in China supply nearly all of the world’s rare-earths metal, and the Chinese government uses its near monopoly as political leverage: It was accused of halting rare-earth exports to Japan during a territorial dispute last year, and also announced a restriction of worldwide rare-earth exports, which sent chills through markets and tech companies.

The same article explains that the U.S., Canada, Brazil and other countries have reserves and “used to produce a sizeable percentage of the world supply before shutting many mines because of environmental concerns.”

Some minerals such as Tellurium, one of the elements about which the DOE is concerned, are just plain rare. In fact, Tellurium is one of the rarest minerals found in the earth’s crust.

Rare earths are needed for more than just solar panels.  They are used for wind turbines and hybrid car batteries. And if our “energy independence” comes from renewables such as solar, they will have to compete with iPods, cell phones, computers, batteries, and more.

Popular Mechanics also explores the possibility of deep-sea mining for rare earths but ultimately concluded, “if you’re wondering where rare-earth components in computer chips and solar cells will come from for the next decade, the answer is clear—China.”

The myth that green energy is “clean” energy.

Manufacturing solar panels isn’t clean.

Two of the three solar companies profiled earlier, GE and Abound, already produce or plan to make Cadmium Telluride (CdTe) thin film photovoltaics (PV). CdTe is a compound formed from Cadmium and Tellurium. While Tellurium is rare, Cadmium is a highly toxic human carcinogen.  According to the Occupational Safety and Health Administration (OSHA), the compound CdTe is also a carcinogen.  Depending on the level of exposure, health effects range from kidney damage, fragile bones, lung damage, and death.

Because the U.S. doesn’t mine much of these elements here, U.S. manufacturers look elsewhere. Sadly, individual tragedy in China’s “cancer villages” reveals the dirty secret of “clean energy.

Yun Yaoshun’s two granddaughters died at the ages of 12 and 18, succumbing to kidney and stomach cancer even though these types of cancers rarely affect children. The World Health Organization has suggested that the high rate of such digestive cancers are due to the ingestion of polluted water.

The river where the children played stretches from the bottom of the Daboshan mine…Its waters are contaminated by cadmium, lead, indium and zinc and other metals.

Lake near the girls’ home that appeared in Intellasia.

Lake near the girls’ home that appeared in Intellasia.

Mining in China has turned towns and hamlets into “cancer villages.” Rivers run murky white to shades of orange. Fish and ducks are dead. And villagers bury friends and neighbors who die of cancer in their 30s and 40s reports Intellasia.

Another eye-opening news report on rare earth mining and processing from the Channel 4 in the United Kingdom claims, “it doesn’t look very green, rare earth processing in China is a messy, dangerous, polluting business. It uses toxic chemicals…workers have little or no protection.”

We still don’t know how large solar installations covering thousands of acres in the desert over long periods of time will affect the ecosystem.

To answer our earlier question, is the taxpayer “investment” in solar power worth the cost to achieve “energy independence” with “clean” power sources? It’s a trick question because solar is neither a domestic product nor a clean one.

The bottom line is that all energy sources come with some type of risk and to assume that solar panels are an economic and environmental panacea is wrong, despite what the Denver Post and other New Energy Economy cheerleaders would like us to believe.

If we are going to continue on the path of alternative energy, we should do so with out eyes wide open.

Amy Oliver Cooke is the founder of Mothers Against Debt (www. Mothersagainstdebt.com). She is also the director of the Colorado Transparency Project for the Independence Institute and writes on energy policy.  She can be reached at amy@i2i.org. Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.

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