Solar Update (Part 1 of 2) – New Study Finds U.S. Must Spend @ $30 Billion A Year To Generate 10% Of Its Power from Solar by 2025
Submitted by EnergyTechStocks.com
A new study lays out the daunting task the United States faces if it is to generate 10% of its electricity from solar power by 2025, even as the study, from green energy advocacy Clean Edge, emphasized that solar power should be cost competitive with fossil fuel sources of generation by 2015.
The study concluded that U.S. electric utilities would have to spend anywhere from $26 billion to $33 billion per year – as much as $560 million between now and 2025 – to increase solar’s contribution to overall U.S. electrical generation capacity to 10%, compared with less than 1% currently.
The takeaway here for investors is that, whatever technological advances are made to bring down the production cost of solar power, the industry’s future in the U.S. is likely to remain wedded to politics for years to come. To be sure, should America succeed in generating just 3% to 5% of its power from solar by 2025, many investors will do extremely well. But they face their own daunting task of keeping a close eye on every twist and turn in Congress and the 50 state legislatures.
With U.S. utility rates expected possibly to double within five years or less, it seems highly unlikely America’s power companies will voluntarily spend billions on what in their minds is still a fringe power source, unless forced to under Congressional and state legislative mandates. Roughly half of all U.S. states now have some sort of renewable power “mandate” on their books, but these mandates don’t come anywhere near requiring such a massive increase in solar electric generation. Congress, meanwhile, can’t make up its mind whether simply to extend tax incentives for solar and also wind, geothermal and other “green” power sources.
The rhetoric from both U.S. presidential candidates would suggest that whoever wins the White House in November will beef up federal mandates for solar, but next year Americans likely will be screaming so loudly over high energy prices (gasoline, natural gas and home heating oil, as well as electricity) that politicians of both parties may have little appetite for forcing utilities to spend on solar power, costs they would pass through to their ratepayers. Indeed, as EnergyTechStocks.com has reported, even U.S. interest in addressing climate change – a process that could require spending of hundreds of billions of taxpayer dollars – could take a back seat next year to the harsh economic reality of high energy prices.
