One of the results of eight years of Reaganism in Washington was the near eclipse of the government’s solar energy research and promotion program. The Californian came to town in 1981 touting atomic power and he poured money into subsidizing and advancing that failed and risky technology while starving the Energy Department’s solar and conservation budgets.
From the point of view of developing a clean, inexhaustible form of energy that does not damage the earth, as do nuclear’s radioactivity and fossil fuels’ Greenhouse effect, Reagan’s behavior was strange indeed. For America in the Seventies had forged ahead of its industrialized competitors overseas in the range and diversity of its solar power research. We were on the frontiers of developing the world’s next giant industry, replete with export potential.
But an over-riding factor dominated Reagan’s mind: Neither the oil, coal, uranium or electric utility industries favored the emphasis on solar. They viewed solar as breeding hundreds of new competitors, complete with self-help kits for homeowners, tapping an energy source that cannot be monopolized or embargoed.
Consider the words of Elmer B. Kael in, president of Potomac Electric cautioning his industry colleagues in 1983: “The most significant threat to us is solar energy.” The costs “will cross sometime,” he said and when they do, homeowners will have every incentive to install solar collectors and pull the plug on the electric company.
But while many, but not all, electric utilities bemoan this prospect, the oil company moguls typically have been much more systematic in the way they are blocking out the application of the sun’s rays. First, they
bought up most of the solar photovoltaic industry in the U.S. In 1980, three firms — Amoco, Arco and– controlled 79% of the market. Three years later, with Exxon joining them following its acquisition of Solar Power Corp., these four oil companies controlled over 80% of the U.S. photovoltaic market and more than 50% of the world market. By mid-1988, just Arco and Amoco controlled 83% of the U.S. market.
What did these petroleum giants do with such control? Well, have you been hearing much from these firms about solar energy in their advertisements and other promotions? Before being acquired these solar energy companies were enthusiastic and outspoken advocates of this source of power. No more. Did you read about the powerful Washington-based oil lobby blocking Reagan’s proposal that passed Congress in 1986 to eliminate the solar energy tax credit which homeowners and other solar purchasers were using? Not at all.
Yet the 1986 tax law preserved some very valuable oil company tax benefits which did not exactly contribute to a level playing field with the development of solar. The fledging solar industry had to abide by the marketplace’s judgment, while the profit-glutted oil industry continued to be a giant government welfare recipient.
What’s more, the oil lobby cornered the government solar contract business, such as it is, by making sure that the specifications could only be met by them. In the marketplace, the oil companies engaged in predatory pricing, according to 15 out of 16 photovoltaic companies surveyed by the Small Business Administration in the early Eighties. In control, they undercut any small, independent competitors to keep them off balance or drive them out of business. The oil companies’ highest priority is to slow the growth of solar so as to protect the value of their
oil and gas investments and reserves. Reagan’s antitrust agencies looked the other way.
One small but aggressive champion of solar is a company called Solar Electric based in Rohnert Park, California. Its President, Gary Starr, appears on talk shows and at conferences to make his main point that today photovoltaics “are cost effective for a wide variety of applications.” If given the same backing that atomic energy received, photovoltaics could be cost-effective with all forms of generating electricity and do it virtually pollution free, he says.
It is quite true that the cost of photovoltaics had dropped sharply in the heyday of solar research. Starr, who lives in a solar powered home and drives a solar-charged electric car, estimates that the current world market for photovoltaics is about $200 million. If the Pentagon and other government users ordered an additional $250 million, the cost would drop from the present level of $5.00 per watt to $2.00 or less per watt, he observes. “There are new, recent technological breakthroughs that can lower the cost even further within the next two years,” he adds.
With more forebodings about acid rain and Green House warming, and with oil imports in January exceeding domestic U.S. production, maybe the Bush government will start looking sunward.