Guest Post by David Middleton
The cost of each taxpayer-financed green energy job created since 2009:
$26.32 billion divided by 2,298 jobs = $11.45 million per job…
Green energy jobs and DOE loans are tallied under programs 1703 and 1705 on this list.
Permanent jobs created: 2,298
Taxpayer financed loan guarantees: $26.33 billion
19 of the projects cost more than $10 million per permanent job…
Even if you use the Obama maldaministration’s accounting methods and include temporary employment, the totally idiotic “jobs created/saved” category and include the 33,000 Ford Motor Company jobs “saved”, you get ~60,000 jobs at a cost of $34.5 billion –> $580,000 per job.
Bear in mind that Mr. Obama promised “to create 5 million jobs over 10 years by directing taxpayer funds toward renewable energy projects.” He’s currently 4,997,702 short of the 5 million mark.
The Full Cost of “Green Energy” Jobs
I have handy cost estimates for three of the solar plants near the top of the list of $10 million-plus jobs. If I factor in the increased cost of electricity, the cost per permanent job literally skyrockets, as promised by candidate Obama in 2008.
I generously assumed that the three solar PV plants could achieve a 30% capacity factor (the average is 25%), that they could achieve a levelized generation cost (LCOE) of $144.30 per MWh (DOE’s most recent average for plants coming online in 2018) and that they could remain in service for 20 years.
The total cost to the economy per permanent “green energy” job created by these three solar PV plants is $82.3 million. If I add in the 2,450 temporary construction jobs that were created, the cost per job drops to $2.8 million per job.
The Carbon-Free Benefits of Green Energy
The carbon-free “benefit” is a 0.007% reduction in annual global carbon emissions, relative to coal (0.00035% relative to natural gas). Neither the climate nor the oceans will notice this “benefit.”
Each MW of coal generation displaced by solar PV reduces global carbon emissions by about 0.000008% and doubles (or more) the cost of electricity. Natural gas would achieve half the carbon emission reduction at about 1/3 the cost of solar and a slightly lower cost than coal.
Of course, nuclear would solve the whole problem… But it’s frowned upon by greenies.
The Irony is priceless…
According to the EPA, coal yields 2,249 lbs/MWh of carbon dioxide per MWh of electricity generated. That works out to 1.02 metric tons of CO2 per MWh of generation.
In 2011, 1.8 million MWh (1.8 TWh) of electricity were generated in these United States by solar power plants. Assuming this generation displaced coal, 1.87 million metric tons of CO2 emissions were averted.
That’s a lot! Right?
Well, no it is not a lot. 1.87 million tons of CO2 emissions is barely a rounding error compared to total global carbon emissions.
1.87 million tons of CO2 is 0.51 million tons of carbon. According to CDIAC, the total global carbon emissions in 2011 were 9,471.37 million tons of carbon.
9,471.37 – 0.51 = 9,470.86
The minuend and difference both round to 9,471 million tons of carbon.
9,471 million tons of carbon is 9.5 Gt of carbon. Natural carbon sources emit 190 to 225 Gt per year…
Anthropogenic emissions account for only 4-5% of the total carbon budget. 1.8 TWh of US solar generation in 2011 reduced the 4-5% component by 0.005%.
This would be funny if it didn’t cost so much money.
In 2011 there was 4,389 MW of solar PV installed capacity in these United States. At $6 million per MW, the total cost for those solar plants was ~$26.3 billion. Had that money been spent on natural gas-fired plants (~$900,000 per MW), it could have displaced 29,260 MW of coal-fired capacity. This would have generated 223 TWh of electricity (solar only yielded 1.8 TWh. Natural gas yields about half the carbon emissions as coal. If 223 TWh of coal-fired generation had been displaced by natural gas, it would have reduced global carbon emissions by ~56 metric tons (solar only reduced it by 0.51 metric tons).
Here’s a “what if” comparison:
Black = What if solar did not displace coal-fired plants.
Green = Actual solar generation and actual emissions.
Red = What if the money spent on solar had been spent on natural gas-fired plants.
Data Source: BP Statistical Review of World Energy June 2012.
Of course, since CO2 is not a real pollutant, only the cost matters… But it is funny – Natural gas would be a far more effective weapon than solar for tilting at AGW windmills… 
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I want some – which politician do I have to contribute to to qualify for a DOE green energy loan? Do I have to pay it back, or can I do a Solyndra?
http://en.wikipedia.org/wiki/Solyndra
O come now these charts don’t even include all the hookers, coke dealers and other assorted jobs created from all that spending.
It’s only a game of monopoly in its last throes anyway, and the current winners are doing whatever they want. I’m looking forward to the next phase which will begin when someone overturns this game,… like by starting WWIII..
It’s even worse than that! Tesla is the only real bragging rights proposition of the program, but this piece adds a little perspective to that notion
http://www.slate.com/articles/business/moneybox/2013/05/tesla_is_worse_than_solyndra_how_the_u_s_government_bungled_its_investment.single.html
…”When the government’s negotiators started hammering out the details of the Tesla investment in mid-2009, it was obvious to both sides that the feds were in a position to name their terms. Tesla’s management knew that if they couldn’t get the government’s money at 3 or 4 percent interest, their next cheapest source of capital would cost 10 times more, a whopping 30 to 40 percent annually. (That’s according to estimates Tesla made in a regulatory filing, which based its numbers on “venture capital rates of return for companies at a similar stage of development as us.”)’…..
“Personal loans made in 2008 by Elon Musk, Tesla’s co-founder and CEO, provide a telling contrast. Musk received a much higher interest rate (10 percent) from Tesla and, more importantly, the option to convert his $38 million of debt into shares of Tesla stock. That’s exactly what he ended up doing, and the resulting shares are now worth a whopping $1.4 billion—a 3,500 percent return on his investment. By contrast, the Department of Energy earned only $12 million in interest on its $465 million loan—a 2.6 percent return.
The government had huge leeway to demand similar terms as part of its loan, given the yawning gap between its interest rate and the cost of Tesla’s next-best source of capital. The government was ponying up more capital than all of Tesla’s previous investors combined. At a bare minimum, the Department of Energy could have demanded a share of the company equal to the 11 percent Musk received for his $38 million loan the year before. Such an 11 percent share would be worth $1.4 billion to taxpayers today.”….
“And, in fact, the Energy Department actually did negotiate for options on 3 million shares of Tesla stock as part of the original loan, options that would be worth $300 million based on Tesla’s current share price. Unfortunately for taxpayers, those options no longer exist. Tesla had the right to force the extinguishment of those options by repaying the loan early, as it just did. (The Energy Department says that was expected, since unlike typical options these were never meant to turn a profit but rather to encourage Tesla to repay the loan early if it could.)
Elon Musk didn’t mention that $300 million reason when he explained last week why Tesla was repaying the loan early.”…
To be fair this list is loan guarantees, not actual loans, at least in the case of the nuclear loans the financing is simply backed by the feds and is not actually spent by the feds. Claiming that it is the cost per green job is misleading, this more accurately represents the liability per green job. Keeping in mind the AP1000 reactors are going to take about 10 years to complete the number is much higher than 800 permanent jobs per 8 billion.
The final bar chart does it for me. That’s a terrific way to see what affect PV solar has on its intended result… zip, nada, nothing. However, the cost to society is very high.
Ecoloon economics at its best. Any discussion on cost and economic benefit are verboten and not factors worthy of consideration.
Ecoloon economics is derived from ecoloon science, whose primary purpose is the perpetuation of the comfortable lifestyle of second rate scientists and computer modellers. Ecoloon science and modelling is deeply flawed and is shown to be so on a daily basis, so the shrill response is ever more scary forecasts of imminent Thermageddon.
Ecoloon politics is derived from ecoloon science, where dubious/gullible/greedy politicians compete to be seen to be the greenest, as they perceive this to be an assured vote winner. The two smug concepts of “Greener than thou” and “Save the Planet” have cost us all dearly and for no benefit whatsoever.
One of the best comments I have seen on this is that we live in the days of the Carbon Inquisition, where fanatical zealots of a false doctrine seek to stifle all opposition to their beliefs. So how does it feel to be a climate heretic?
Another cost factor of solar energy is any portion of solar electricity added to the grid needs to be backed up 100% by conventional coal/natural gas power plants to immediately take over should any rare event–such as, oh, I don’t know, frigging “clouds” perhaps?–occur.
The wonderful thing about solar’s conventional power back up, is that even when the solar plants are producing energy, these conventional boilers need to running, but they can’t produced any additional electricity already being added to the grid by “green” solar plants… So in essence, you get all this added “evil” CO2 from the backup boilers with no added electricity; except. of course, when that rare event called “clouds” occurs….
My head is exploding…
I think that the Administration actually believed that they were going to simply create a green economy that would provide the employment lost when the housing bubble burst. I am sure they are shocked that this didn’t occur. This is because the whole lot of them are men of talk. those who have actually done something knew this was never going to happen.
Embedded deep into the leftists’ eco-nomics models, is the mysterious phenomenon called, “The Multiplier Effect.”…
This is that inexplicable process where $1 of spent taxpayer money miraculously adds $1.84 (at least according to Nancy Pelosi) to the GDP….
So this $26.32 Billion blown on “green” energy has actually added $48.43 Billion to the US GDP.
If this ethereal multiplier effect actually exists, then I propose we all stop working, have the FED print up $8.7 trillion to be distributed equally to everyone, then we could all somehow multiply this “free” money to $16 trillion (current US GDP) buying stuff that doesn’t exist (nobody is working in this Utopia, remember?)….
Oh, I know, let’s just have the Chinese deliver stuff they produce to our door and pay them with the multiplying monopoly money…. That’ll work… The eco-nomic models say it will….
Wow.. 11 million for 1 job. Look, if you build an atomic power station worth 10 billion and there are 500 employees, then…?!
@Matt,
If a company builds a nuclear power plant, it does so to make money by fulfilling a market-driven need for goods and services, not to create jobs.
Businesses do not exist to create jobs. Business exists to make money for the owners. A business exists to create and maintain a customer.
The purpose of the DOE loans seems to have been to create green energy jobs, provide goods and services for which there was little to no market-driven demand and to reduce emissions of a non-pollutant.
I am a Progressive of a somewhat skeptical bent on the subject of climate change, so I don’t quite fit the mold.
As a Progressive, I think government should be involved in research, development, and funding of basic science and alternative energy projects. This is apart from any argument about reducing greenhouse gas emissions. We should always be looking at alternatives. No matter how much oil and gas there is eventually alternative technologies will be cheaper than fossil fuel. I include in nuclear which I notice are the first two entries on the list of green projects which were among the tops in producing permanent jobs along with one solar project.
The “what-if” comparison to spending the money on gas fired power plants is absurd. The industry is already switching to gas-fired plants. There is no need for the government to spend money on it. Government should be involved at the edges of technology. That means a good many of the projects will fail but we can’t look at any of this from a short-term accounting point of view.
I work for a large telecommunications company. There is a project I have been involved with in this company that will have no appreciable payoff probably for the next few years. Why is the company doing it? The project is about the future. It is about technologies that sooner or later the company will need to be involved with to stay competitive. Businesses that think only short-term are either in desperate trouble and struggling to stay afloat or will not be long-lived because of their short-term focus.
If we spend a million dollars on a thousand projects, 999 of them could fail miserably but one project could result in economic growth that more than pays back the billion dollars. A success rate such as that could superficially be seen as a failure yet, in fact, it would be a huge success.
@James Baldwin Cross,
I agree. The government should not be spending money on natural gas-fired plants or any other power plants unless they are to power government facilities.
The problem is that this is not R&D or basic science support. This is taxpayer financing of uneconomic utility scale infrastructure for which there is little to no market-driven demand.
You are very correct… The private sector and free market are switching to gas because it is economic and there is abundant market-driven demand.
You have to put it into the strategic context: that’s 2,298 additions to the 47%
The problem with modern, government funded R&D is that it’s became nothing more than a politically expedient way to legally shower supporters with vast amounts of cash. The “environmental” aspect is there to provide “plausible denial” for any who would dare to criticize. That’s what Solyndra was all about – the worst part wasn’t that the technology failed, it was that the politically connected founder of the company, a bundler of vast amounts of campaign cash, skimmed huge amounts of the money that was supposed to go to the tech and diverted it to his own bank accounts. And the rest was gambled on a “heads I win, tails you, the taxpayers, lose” kind of deal, so it didn’t mean flip to him when it all came crashing down.
The majority of government R&D in this country is today nothing but a sham and a fraud, a way to skim the till for people who are more than willing to whisper sweet nothings into the ears of those with power.
It’s just not worth it anymore. Cut it all.
What a total waste of taxpayers money for negative benefit. I say negative because without green energy America would have:-
cheaper energy,
more employed,
better health care,
less poverty,
less taxes,
in fact things would be so much better for the whole planet.
The emissions of solar PV should be accounted for. I’ve seen analyses that claim solar panels
are responsible for half as much CO2 as natural gas. and probably 3 times that of nuclear. Just because an energy source looks appear to generate emissions doesn’t make it so. You are also forgetting the costs involved in devoting all that land for solar farms- I estimate that to equal the gross output of modern Gen 3 nuclear plant of 1500 MW, 80,000 acres of solar panels
would be required. Solar panel generation, being uncontrolled, also requires additional expenditures to allow it to be accepted by the grid (backup capacity, etc.). California, for example, is building a series of pumped storage facilities to allow for short term time displacement of solar
power (a few hours) and those facilities cost a lot – not much less than a nuclear facility, but they only hold enough water to produce power for 10 hours or so. At lest 25% of the solar power is lost
when sent to those pumped storage reservoirs. It’s insane.
James Cross says:
June 12, 2013 at 3:22 am
“If we spend a million dollars on a thousand projects, 999 of them could fail miserably but one project could result in economic growth that more than pays back the billion dollars. A success rate such as that could superficially be seen as a failure yet, in fact, it would be a huge success.”
The problem is that we (in the U.S.A.) are broke – that is, we are all collectively in debt up to our eyeballs because of the wasteful spending practices engaged in by our government.
However, of the borrowed funds for government R&D that remain, I’d be willing divert more towards innovative energy projects provided we ramp down ALL spending on CAGW climate science, which has been shown to have had NO economic benefit whatsoever (except to those few “scientists” who benefit from the government largess)…
SAMURAI says:
June 12, 2013 at 1:07 am
Oh, I know, let’s just have the Chinese deliver stuff they produce to our door and pay them with the multiplying monopoly money…. That’ll work… The eco-nomic models say it will….
===================
Once you are maxed out, expect interest rates to go up. We saw the same thing during the 60’s and 70’s. The banks were only too happy to lend the government money at low rates – so that it looked attractive. Then in the early 80’s, the banks upped the rates, and everyone found out who really controlled the economy.
Today’s interest rates are well below long term historical averages and this is encouraging the government to act like a boat load of drunken sailors newly arrived in port with a year’s back wages in their pockets. Tomorrow they will wake up back on board with massive hangovers, empty pockets, and the taxpayers will be on the hook to clean up the mess. Until the captain settles up with the port authorities, the ship will not be going anywhere.
It’s kind of funny that Tesla is thought of as an environmental “success”, when all they do is make pretty toys for millionaires.
There’s not a chance of them ever building anything that a normal, working person could buy.
Remind me why its important to subsidize millionaire’s toys again?
The “what-if” is anything but absurd.
Why did the Federal government choose to taxpayer-finance solar power plants?
Was it to create jobs or spur economic activity? If so, it failed miserably. If the same amount of money had been spend on natural gas-fired plants, nearly 7 times as much generating capacity would have been built. That generating capacity would have had 3 times the capacity factor as solar. It would have generated over 120 times as much electricity at less than half the cost per kWh as solar. Between the building of far more power plants and the injection of cheap electricity into the economy, far more jobs would have been created.
Was it to reduce greenhouse gas emissions? If so, it failed even more miserably. It made no statistically meaningful difference in US carbon emissions. Had the same amount of money been spent on natural gas-fired plants, the reduction in carbon emissions would have been 50 times greater than with solar.
Was it to prove that solar PV can be used at a utility scale? If so, it was idiotic. Of course it can work. It just can’t economically compete with coal or natural gas.
Now… I am not advocating the financing of natural gas-fired power plants with taxpayer money. I’m just pointing out the fact that had the money been spent on natural gas-fired plants, it would have been more beneficial to the economy and yielded a far greater reduction in carbon emissions.
James Cross says:
June 12, 2013 at 3:22 am
“If we spend a million dollars on a thousand projects, 999 of them could fail miserably but one project could result in economic growth that more than pays back the billion dollars.
============
That requires the government to pick and choose who to fund. Which ends up corrupting the science involved. Success in science ends up being a measure of how well you write grant applications, not how well you conduct science. The scientists involved get paid up front, no matter how poor the results they deliver. You end up with $800 hammers and a broke Treasury.
A much better approach is to reward success. Offer a billion dollar prize for a Cure for Cancer (or any other problem that costs the government money) and people and companies will be falling over themselves, at their own cost, investing their own time and money to discover the cure. Until the cure is discovered, the government hasn’t had to spend one cent. Once it is, the government stands to make billions on licensing and cost savings.
The problem is that governments don’t like this approach. They like to be able to hand out money selectively, so they can reward their friends and punish their enemies.
There is very little need for taxes if the government wanted to. By controlling where infrastructure is built the government controls land prices. Build a road, the land towards the remote end suddenly becomes more valuable. In this fashion the government could make all the money it needs to operate through the buying and selling of land. Buy low, add infrastructure, sell high. The profit is then available to minimize taxes.
What the government does instead is to allow insiders, those privy to the government’s plans, to buy the land ahead of development. It is the friends of the government that benefit when governments develops infrastructure, paid for by the taxpayers. It is the friends of government that recognize there is serious money to be made if their friends are elected. Thus they contribute large at election time.
Like military toilet-seats on double-steroids.
James Cross says:
June 12, 2013 at 3:22 am
The “what-if” comparison to spending the money on gas fired power plants is absurd.
==========
Only if the government has infinite money. Otherwise the government must choose to fund some things and not fund others.
The problem with government funding is that it distorts the playing field. What happens to your business if the government gives your competitor across the street a billion dollar loan guarantee, but gives you nothing? You competitor immediately has a access to a billion dollars in low cost funds to drive you and every other competitor out of business.
Once the competition is out of the way, your (former) competitor now has a monopoly and can raise prices to pay back the loan. It doesn’t matter who had the better product. You are out of business because your cost of money was higher as a result of government backed loans to your competitor.
Perhaps this is what we see happening with luxury electric cars? What looks like a success story may simply be a high priced government created monopoly. Who is to say that some start-up electric car maker in the US didn’t have a much better product, something that would have proven practical for the masses, but was driven out of business as a result of the government loan guarantees?