Is Solar energy Economical?

Steven Kraus

In an April 25 New York Times article (“Today’s Energy Jobs Are in Solar, Not Coal“) reporter Nadja Popovich wrote that “Last year, the solar industry employed many more Americans [373,807] than coal [160,119], while wind power topped 100,000 jobs.” Those energy employment figures are based on a Department of Energy report (“U.S. Energy and Employment Report“) released earlier this year that provides the most complete analysis available of employment in the energy economy.

But simply reporting rather enthusiastically (see the NYT headline again) that the solar industry employs lots of Americans, more than twice as many as the number of coal miners and utility workers at electric power plants using coal, is only telling a small part of the story. Here are some important energy facts that help provide a more complete picture about how much energy is being produced in different sectors, how many workers it takes to produce a given amount of electric power, and which sectors receive the most generous taxpayer handouts.

To start, despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here). And that’s a lot of solar workers: about the same as the combined number of employees working at Exxon Mobil, Chevron, Apple, Johnson & Johnson, Microsoft, Pfizer, Ford Motor Company and Procter & Gamble.

In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar’s minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year.

The graphic above helps to quantify the significant differences in electric power output per employee for coal, natural gas and solar workers. In 2016, the coal sector generated an average of 7,745 megawatt hours of electric power per worker, more than twice the 3,812 megawatt hours of electricity generated per natural gas worker, and 79 times more electric power per worker than the solar industry, which produced only 98 megawatt hours of electricity per worker. Therefore, to produce the same amount of electric power as just one coal worker would require two natural gas workers and an amazingly-high 79 solar workers.

Bottom Line: The goal of America’s energy sector isn’t to create as many jobs as possible (as the NYT article would apparently have us believe) especially the politically-favored and heavily-subsidized renewable energy jobs. Rather, the economic goal is to produce as much electric power as possible at the lowest possible cost, and that means we want the fewest number of energy workers!

It’s a common mistake of politicians and the media to treat jobs as an economic benefit, when in fact, jobs are an economic cost or price of production. As Milton Friedman explained nearly 40 years ago, the appropriate economic objective is to have the fewest number of workers producing the greatest amount of output. When it comes to solar energy, we are employing a very large number of workers who produce a very small amount of electric power – a sure sign of economic inefficiency.

As the graphic above clearly demonstrates, today’s most productive energy workers are in coal and natural gas, not solar. And there’s only one reason that the solar workforce has been increasing so rapidly (25 percent gain last year) despite its dismal record of worker productivity and minuscule share of U.S. electric power — government policies that have subsidized the solar industry nearly 350 times more than fossil fuels per unit of electricity production.

Only in the fantasy world of the Beltway does it make sense to spend billions of taxpayer dollars to artificially support an energy source that is so labor-intensive that it requires a workforce 79 times greater per unit of energy produced than coal, and nearly 40 times greater than natural gas. If I could re-title the New York Times article, I think a better choice would be “Today’s Most Productive Energy Workers are in Coal and Gas, Not Solar.”

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