5 Ways Solar Power Helps the Economy

how solar helps the economy

When people think of solar energy, they may first think of its benefits for the environment. By replacing fossil fuels, solar power and other clean energy sources reduce greenhouse gas emissions, which helps slow climate disruption. Clean energy also reduces local pollution of water and air that can cause cancer and respiratory ailments like asthma.

Pollution especially impacts fence-line communities located near dirty energy facilities like coal-fired power plants, natural gas compressor stations and oil refineries. Such communities are overwhelmingly home to low-income residents and people of color, making the clean-up of this pollution a question of social equity.

It is impossible to put a price on the human suffering caused in communities by dirty energy. But dealing with its health impacts costs Americans hundreds of billions of dollars a year, according to a new report from the Natural Resources Defense Council. Using more solar energy can help reduce that suffering and cut those costs.

Solar also offers other benefits to the economy. Here are the top five:

1. Solar’s Fuel Source is Free and the Supply is Unlimited

This point is so obvious as to almost require no explanation: buy your fuel or get your fuel for free. On the one hand, you can choose to generate power by burning coal, gas, oil and uranium, which you have to buy over and over as long as you want to make power, and which always costs money. On the other, you can choose to generate power from sunlight, which is free. Could the economic proposition be any simpler?

Yet, somehow, politicians still manage to argue about how the cost of solar power compares to traditional energy sources.

All energy sources cost money to use when you are first building the infrastructure to use them, whether oil wells or pipelines or solar panels. When it comes to generating electricity specifically, there’s always an upfront cost to build a power plant. Yet, once the plant is built, there’s a big difference between traditional energy that burns fuel – fossil fuels and nuclear power – and renewable energy that converts sunlight, wind or waterpower into electricity.

After all, a thermal power plant must continuously pay to source supplies from volatile world markets of natural gas, goal or uranium to burn. With solar having come down in cost 80% over the last decade, some electric utilities have decided that it’s no longer economic to keep burning coal. Surely, as solar keeps getting cheaper, they’ll increasingly reject natural gas too, for reasons of cost alone.

Solar power has no fuel cost. Like the wind or waves, sunlight is free, and as long as the sun keeps shining, sunshine will never run out. Unlike coal, oil, gas and uranium, which are finite and could deplete to critical levels within our lifetime, sunlight will always be available and plentiful. Even in America’s coldest states, solar panels continue to work in the winter and snow.

All facilities built to generate energy also require ongoing maintenance. But compared to the costs to operate a nuclear power plant, not to mention a traditional thermal power plant that burns some type of fuel like natural gas, the costs to operate and maintain a solar array are negligible.

2. Solar Power Companies Create Jobs

The solar industry has started to get the recognition it deserves for job creation. Here, we’ll just note that for years, solar power has been one of the fastest growing sources of new jobs in the U.S. economy. This growth will continue for years to come. Solar will create more jobs than any other leading industry in the nation, according to projections from the U.S. Bureau of Labor Statistics. In 2016 there were about 11,300 people working in solar installation, manufacturing, and related fields, while the industry is expected to reach close to 23,100 people in 2026.

3. Solar Power Diversifies the U.S. Energy Portfolio

Energy diversification means using different energy sources to reduce dependence on one single resource. Using a diversity of energy sources protects consumers from price spikes in any one source, while also lowering the possibility of an actual energy emergency from natural disasters or if another energy source fails. A national economy must operate a balanced portfolio with diverse energy sources in the same way that stock market investors seek to balance their financial portfolios with stocks from different industries.

Today, America gets its energy from a combination of fossil fuels, nuclear power, and renewables.

In the future, the world economy will have to achieve energy diversity without fossil fuels in order to reach the goals of the Paris Agreement to keep global temperature increase below 1.5 degrees Celsius, just reaffirmed by President Biden. That means we need to reach peak greenhouse gas emissions as soon as possible, and then start reducing climate pollution rapidly after that.

Fortunately, a complete energy portfolio can be built in the future using clean energy sources alone, balancing solar with wind, hydroelectric, geothermal, tidal power, and other potential renewable technologies still in development. Numerous plans have been developed that specify the mix of each source plus energy efficiency and conservation to achieve 100% clean energy.

4. Solar Power Saves Energy Customers Money on Electricity

Back in 2020 solar was deemed the cheapest electricity in history by the International Energy Agency. It is also predicted that fossil fuels will only become more expensive while renewable energy continues to fall in price. These price reductions are reflected in electricity bills, with some homeowners saving between $10,000-30,000 over the lifetime of a rooftop solar power system.

Commercial solar customers like schools, hospitals and businesses have already started saving money by using solar power. A couple of Secure Futures’s own customers are good examples.

Augusta County Public Schools installed 1.8 megawatts of solar at seven of their campuses that will save them around $495,000 dollars over the next 20 years. InterChange Group, a regional third-party logistics provider for cold storage warehouses, went solar in 2019 with a 1.6 MW solar system. In the first year with full data, their demand for electric power rose slightsly in 2018 versus 2019. Yet, their annual electric bill went down by $135,518, representing a one-year decline of 32% in electricity costs.

5. Climate Change is More Expensive than Transitioning to 100% Renewables

As the earth’s temperature increases, there is an equivalent increase in the severity of weather disasters such as wildfires, heatwaves, droughts, coastal storms and more. Weather disasters kill people and displace communities. According to a report commissioned by the Environmental Defense Fund, since 1980, the U.S. has “seen a four-fold increase in the annual number of severe weather disasters.” And with natural disasters only on the rise, this number will keep getting bigger.

This report specifically noted that the costs of disaster assistance or relief ultimately outweigh the amount it would cost to fully transition to renewable energy in the nation. “The U.S. Government Accountability Office estimates that since 2005, the federal government, including FEMA, has spent at least $450 billion on disaster assistance.”

Meanwhile, Deloitte explains how every degree of atmospheric heating will cost the American economy. “Climate change is expected to have severe effects on business output. In the United States, studies estimate a 1.2% decline in the annual gross domestic product (GDP) for every 1 [degree Celsius] increase in temperature.”

Again, there will be much human suffering behind these numbers. It’s almost incomprehensible that our society would be prepared to tolerate the suffering and the costs, when you consider that, according to a study by the energy research firm Wood Mackenzie, “converting the entire United States power grid to 100% renewable energy in the next decade would cost an estimated $4.5 trillion.”

Let that sink in: Transitioning to renewable energy more quickly will be cheaper than sticking with business as usual. Much cheaper.

State and federal governments have made great strides recently to remove artificial barriers put up by special interests that were blocking a clean economy. But there’s much more to do, and we must pick up the pace.

Fortunately, we don’t have to choose between the economy and the environment. Converting to 100% clean energy, with a big role for solar power, will be the best thing that America can do not only to avoid runaway climate disruption but also to ensure our prosperity in the future.

Written by: Staff Author