Report scrutinizes nuclear vs. solar subsidies

August 28, 2013 | By Barbara Vergetis Lundin

The California nuclear industry has received $8.21 billion in federal subsidies over the last 50 years, according to a report from DBL Investors, a double bottom line venture capital firm. The report compares federal subsidies for nuclear energy to those provided for distributed solar energy.

SONGS Credit: awnisALAN/Wikimedia Commons

Nuclear energy has received four times more federal support than distributed solar over a period six times as long, the report says. While solar is beginning to comprise a significant portion of installed capacity in California, it has received less support than nuclear did in its earliest years. Meanwhile the closure of San Onofre has reduced California's nuclear generation capacity by almost 50 percent to roughly 10 percent of California's total energy generation (based on the actual energy produced in state) and approximately 3 percent of California's total megawatt capacity (based on the state's total production assets).

The federal solar investment tax credits are slated to revert from 30 percent to 10 percent of initial system costs in 2016. In recent years, innovations and price declines in distributed solar and its financing have contributed to the rapid expansion of solar energy on residential, commercial and government rooftops, lawns and parking lots throughout California and across the country. In the context of these recent market developments, public support has been and continues to be extremely important in shaping the energy landscape. In fact, no energy technology in U.S. history has gained significant market traction without subsidies from the federal government, according to the report.

Energy technologies in California are no exception. Federal subsidies were necessary to the early growth of the nuclear industry and have been vital to the more recent growth of the distributed solar industry. But, contrary to popular belief, federal subsidy levels for alternative energy sources have been much lower than subsidies for "traditional" energy sources, such as coal, gas and nuclear, according to the report.

The nuclear industry has also benefited from the Price-Anderson Act, which caps the liability of nuclear power producers in the event of an accident. The Act was originally supposed to be authorized for 10 years, while nuclear developers sought to prove safety and reliability, but has been continuously reauthorized since its passage in 1957.

"In keeping with our nation's tradition of supporting the emergence of new energy sources, federal subsidies were necessary and highly effective for the early growth of the nuclear industry and have been vital to the recent growth of the nascent distributed solar industry," said Nancy E. Pfund, report co-author and managing partner at DBL Investors. "The difference is that despite the declining role of nuclear power in the Golden State, federal subsidies for nuclear have become a perpetuity. Meanwhile, solar subsidies are at risk of ending during the industry's infancy, even as solar creates thousands of California jobs."

For more:
- see this report

http://www.fierceenergy.com/story/report-scrutinizes-nuclear-vs-solar-subsidies/2013-08-28