News and analysis about energy in California with an eye toward renewables.

Nuclear or Solar: Which Gets More Government Subsidies?

Diablo Canyon: California''s llast nuke standing | Photo: Nick Kocharhook/Flickr/Creative Commons License

Feeling sympathetic to criticisms of the subsidies going to put solar panels on rooftops? You're not alone. Financial support of distributed solar has been a hot-button issue since conservatives decided to make the Solyndra bankruptcy a mass media talking point, and certain utilities -- Arizona's largest one being a notable example -- are trying to fan those flames.

But when it comes to subsidies paid to encourage a particular kind of electricity generation, solar's got a lot of catching up to do before it enjoys the public subsidy paid out to another form of power generation: nuclear.

According to a report released last week by a venture capital analysts group, the nuclear industry in California has received federal subsidies equivalent to $8.21 billion in 2012 dollars over the last 50 years. In return for that Californians have received an industry that -- with the closing of the San Onofre Nuclear Generating Station in 2012 -- accounts for just 3 percent of the state's total power generating capacity.

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Meanwhile, distributed solar currently accounts for two percent of the state's generating capacity (and almost one percent of actual generation) for a total federal subsidy of about $2.17 billion dollars, almost all of that spent after 2007.

The report, "Ask Saint Onofrio: Finding What Has Been Lost in A Tale of Two Energy Sources" was prepared by Nancy E. Pfund and Noah W. Walker for DBL Investors, a Bay Area-based socially responsible venture capital firm.

The solar federal subsidies were mainly offered through the Investment Tax Credit that repays costs of solar panel installation, and the 1603 Treasury Grant Program, which the Department of Energy administers to help promote growth and innovation on the manufacturing end of things. Subsidies to nuclear plant operators primarily come in the form of research and development subsidies, as well as the Price-Anderson Nuclear Industries Indemnity Act of 1957, which shifted most potential liability for nuclear plant accidents from the plant operators and their insurers to taxpayers.

Authors Pfund and Walker compared the levels of cumulative federal subsidies in the early years of each industry's growth, with interesting results:

California's Share of Federal Subsidies: Nuclear (1963-1967) and Solar (2007-2011) | Image: DBL Investors

Though nuclear subsidies continued to accumulate dramatically through the 1960s and 1970s, those solar subsidies are slated to dwindle soon, with Investment Tax Credit payments scheduled to drop from their current 30 percent of installation costs to 10 percent in 2016. Despite that planned cut in subsidies, declining costs and proven technology are expected to push solar installations well past current levels.

Meanwhile, the Price-Anderson Act, which was originally set to expire in 1967, has been consistently extended due to utility pressure.

Screen shot 2013-08-29 at 4.14.03 PM.pngAs this pie chart froom the DBL Investors report shows, even in the last decade the DoE's nuclear spending well outstripped its spending on total solar programs, including both distributed and utility-scale solar. And now in 2013, California has one working nuclear power plant providing about a tenth of our energy consumption, with no new nukes planned, and tens of thousands of distributed solar installations with a like number in the pipeline.

What do the reports' authors suggest we take away from their survey? Just this:

In the context of the federal government's embedded subsidies for nuclear facilities and fossil fuel production, as well as potentially expiring federal renewable energy subsidies and very little consensus on energy policy in Washington, the responsibility rests heavily on California to support the Golden State's transition to clean renewable power. California should... find what has been lost in over half a century of energy subsidies: an appropriate balance between policies that support our energy sources of the future and past policies that linger and distort the true cost and benefits of current energy generation.

Also worth noting: Though California's remaining nuclear power station in San Luis Obispo County, named Diablo Canyon, still accounts for about 10 percent of the state's energy consumption, that power comes from two units on an earthquake fault in a tsunami zone. With 30,000 distributed solar installations and more rising, our solar infrastructure is much more resilient to natural disasters. Just something to think about as the prognosis for the doomed reactor at Fukushima worsens with each passing week.


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About the Author

Chris Clarke is a natural history writer and environmental journalist currently at work on a book about the Joshua tree. He lives in Joshua Tree.
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