Dover Sun Park a Job Killer

RE: Dover Sun Park a Job Killer
Caesar Rodney Institute FOIA Request Sheds Light on Costs
DATE : 9/22/11
With the opening of the Dover Sun Park, proponents of alternative energy have driven another stake into the heart of the Delaware economy. Temporary installation jobs needed to build the Park, and others like it, will be offset by the loss of ten permanent jobs elsewhere. Electricity from solar farms costs four to five times more than conventional sources. The extra money spent for electricity will mean fewer trips to the mall, restaurant, or even the dentist. Every product we buy will be more expensive as higher power bills ripple through the economy.
The Dover Sun Park experience will need to be repeated another thirty-five times to meet the level of solar power required by Delaware law. Delaware has the highest percentage requirement for solar power of any state east of the Mississippi.
Dover Sun Park press releases praised the creation of 200 “green” constructions jobs to complete the second largest solar park east of the Mississippi. Also released were the actual hours worked. Those hours convert to each person working about seven weeks or the annualized equivalent of 28 jobs. Those very temporary jobs will cost us $2.3 million each over the next twenty years, the typical contract period. Building thirty-five sun parks over the next fifteen years to meet Delaware law would require 65 installers. The higher electricity costs caused by those parks will result in a loss of about 700 jobs! Please see “The Cost and Economic Impact of Delaware’s Renewable Portfolio Standard” at www.CaesarRodney.org for details.
But, you say, won’t the savings in greenhouse gas generation be worth it? Using the current value of carbon dioxide emission permits in the regional cap and trade market the Dover Sun Park carbon offsets are worth less than $25 thousand a year. The three-fold increase in the U.S. Supply of natural gas has been a carbon emission game-changer as it cuts carbon emissions in half compared to coal. Calpine Corporation switched fuels from coal to natural gas at the Edge Moor electric generating plant saving money and a years’ worth of Dover Sun Park carbon emissions every five days and the entire expected savings of the Delaware solar law in half a year.
Strangely, The City of Dover refused to release the price they will pay for power from the park citing confidentiality agreement restrictions. We believe the ratepayers of Dover and throughout the state should know the cost. Attorney John Paradee, acting at the behest of CRI, obtained the information in a Freedom of Information Act request. The City initially refused to honor the request but did so after CRI urged the Attorney General’s office to render an opinion which cited legal precedence favoring the request.
It is astonishing you are not allowed to know what the Dover Sun Park is costing you. The total added cost of the Sun Park compared to using conventional power over the twenty year contract will be $65 million or $3.25 million a year! The cost will be shared by Dover Electric Utility customers, electric customers around the state, and by tax payers. Thirty-five Dover Sun Parks would add $2.3 billion to electric rates over twenty years or $105 million a year.
The City of Dover will pay about $.155 a kilowatt-hour (KWh) including about $.135/KWh for the electricity and $.02/KWh equivalent for Solar Renewable Energy Credits (SREC). For comparison, electric generation now costs the city about $.10/KWh from conventional sources. This is an increase of 55% in the cost per KWh. Dover residents will pay about $17.25 a year more. However, large commercial users may pay an extra $35,000 a year.
The cost would have been four times higher but the Park developers used a common trick of spreading the cost over ratepayers and tax payers around the state to hide the true impact. Delmarva Power and the Delaware Municipal Electric Cooperative will buy the rest of the SREC’s at a cost of $50 million. Delmarva Power contracted to buy 70% of the SREC’s at $216.70 each and will wind up paying a $24 million premium over the current spot market SREC price. The city will pay an average of $151/ SREC.
In addition, White Oak Solar Energy, LLC, who owns the park, will receive a $13.5 million federal tax credit paid for with deficit spending. The cost of the deficit spending will add another $9.5 million in interest over the twenty years. We pay for the grant and the interest in our tax bills. CRI estimates White Oak will make a guaranteed 11% a year return on their investment at a time when thirty year U. S. Treasury bonds are paying 3% interest.
When homeowners buy a solar installation they bear the risk SREC’s may be worth less in the future. Indeed, prices dropped from $270/ SREC to $100 this year because of an oversupply caused by a more rapid increase in solar installations than expected. The risk of lower SREC values for the Dover Sun Park was shifted to residential and small commercial customers through long term utility contracts. The utilities are forced to buy the credits and pass the cost onto residential and small business customers.
Solar proponents tell us their products will become more competitive. Installed prices have come down 27% over the last two years. The Dover Sun Park uses state of the art technology and the installed price of $4 a watt reflects the recent price reductions. Solar modules in the Park have an efficiency rating of 20% and use mechanical tracking to increase the number of hours the panels are illuminated. They will produce about 50% more power per square foot than the typical module but still only operate a few hours a day and are clouded out almost half the time yielding poor reliability. Even with these improvements solar power remains four to five times more expensive than conventional power and is not reliable.
David T. Stevenson, Director Center for Energy Competitiveness