Washington's Solar Subsidies Fail The Governor's Moral Standard on Climate Change

The Seattle Times reports today on Gov. Jay Inslee's commitment to reducing carbon emissions in Washington state. The governor notes that the carbon-reduction effort is a "moral" imperative and that failure to effectively reduce carbon emissions would be abdication of our responsibility to our grandchildren.

Another way to say it is that policies designed to cut carbon emissions must be judged on results. Our grandchildren really won't care about our intentions if the policies don't produce results. There is a great deal of work to do in this area.

For example, the State of Washington currently requires utilities to pay 15 cents per kilowatt hour (kWh) of solar power put back on the grid from solar-energy systems built outside the state. The purpose of this subsidy is to promote the use of solar energy entirely for the environmental benefit. This does not count additional subsidies for solar-energy systems built in Washington state, where the subsidy can jump up to 54 cents per kWh.

According to the Environmental Law and Policy Center, every megawatt hour (MWh) of solar energy reduces carbon emissions by 1,300 lbs. This is a national average, so the actual amount in Washington state, where our electricity is already significantly decarbonized, is much less. We can, however, use this as a standard to determine whether our policy is reasonable.

Those putting one megawatt hour of solar energy on the grid will receive $150 for that energy. Making the assumption that utilities can re-sell that energy at about 7 cents per kWh, the total amount of subsidy for one MWh of solar energy is $80. That amounts to $135.59 per metric ton of CO2 avoided. Compare that cost to California's most recent auction of carbon reduction permits at $13.62 per metric ton. Washington state is wasting 90 percent of the money it spends on solar subsidies.

Put more plainly, for every $10 Washington state spends on solar panels, it receives $1 of carbon-emissions reductions. That is a failure. If Governor Inslee believes that reducing carbon emissions is a moral issue, that policy is a moral failure.

Remember also that each kWh of solar energy here in Washington is much less effective than in the nation as a whole since our energy is already about 80 percent carbon-free. Thus, the actual cost per ton of carbon reduction in Washington state is much higher making solar subsidies even less effective.

The governor's climate bill specifically includes a requirement that the state analyze climate policies using the metric I've applied here: the cost per ton of carbon emissions avoided or reduced. To meet the moral imperative to reduce carbon, that analysis must look at our current policies to make sure we, and our grandchildren, are receiving the carbon reductions we are paying for.