The National Center for Policy Analysis’s Sterling Burnett this month published an excellent analysis of America’s energy needs and costs. Today solar power is close to our fastest-growing renewable energy source. Its production grew 15.5% in 2009, but it still accounts for less then 0.5% of global electric power output. And it isn’t cheap: subsidized solar energy costs between $220 and $300 a megawatt hour, compared with $110 for electricity nationwide.
That breaks down to $63.10 a megawatt hour for natural gas, $113.90 for nuclear power, $136.20 for modern coal-fired plants, and $210.70 for solar photovoltaic power. According to the Heritage Foundation the subsidies we pay are $23 per megawatt hour for solar and wind, compared with $1.59 for nuclear power, 44 cents for conventional coal, and 25 cents for natural gas. We must start becoming competitive, without large subsidies, to reduce the current distortion in our energy markets.
We should also end the 45-cent-a-gallon subsidy of ethanol, which yields one-third less energy per gallon than gasoline. The cost of ethanol subsidies total about $6 billion per year. Sens. Tom Coburn of Oklahoma and Dianne Feinstein of California have introduced a recent bill to do away with the subsidies, along with a 2.5% tariff and 54-cent duty on imported ethanol.
To put it all in the perspective of the environmentalists and the current administration, consider the statement of Energy Secretary Steven Chu in The Wall Street Journal: “Somehow we have to figure out how to boost the prices of gasoline to the levels in Europe.” The current gasoline price is about $8.50 a gallon in England and $8.80 in France and Germany.