Eric Fruits: The Legislature should immediately put an end to the taxpayer-funded boondoggle.
It seems everywhere you look, “clean energy” is in the news. Last month, the city of Portland distributed nearly $120 million to local nonprofits that promise to deliver clean energy technologies. Congress just passed the lean version of President Biden’s Build Back Better agenda, with more than $350 billion dedicated to clean energy.
Much of that expense will be wasted if Oregon’s experience with a nearly unprecedented program is any guide. The program is called “1.5% for Green Energy Technology,” or GET. Under this program, any government construction or renovation project of $5 million or more must devote 1.5% of its budget to green energy technologies, such as solar panels.
Cascade Policy Institute reviewed all available annual reports of the GET program and found that most projects fail a basic cost-benefit test.
In Portland, the fire department was forced to spend $90,000 under the GET program to install solar panels during the renovation of Fire Station 21, a project that was already behind schedule and over budget. The fire bureau informed the Legislative Assembly that the fire station was “not the best solar site.” Nevertheless, the expenses were mandatory. These solar panels only generate $640 of electricity per year, meaning it would take over 140 years for the project to pay for itself. However, the maximum lifespan of a solar panel is only 30 years.
The new Multnomah County Courthouse project was to spend $6.6 million under the GET program for a large array of solar panels. These investments will have a payback period of 492 years. In 2018, Lane Community College’s mandatory solar and geothermal energy retrofits were estimated to break even 223 years after construction. In 2020, the Salem Police Station was forced to install solar technology that would not repay its construction costs until 149 years later. Most recently, in 2021, Portland Public Schools were forced to spend $2.1 million on solar panels with a payback period of 65 years.
State Rep. Paul Holvey, the primary sponsor of the GET bill in 2007, claimed its purpose was to “give a boost to the solar technology industry in this state.” He also hoped the warrants would “save taxpayers money down the road.” He was wrong on both counts. Solar energy produces only 2% of the state’s total electricity production. In addition, exorbitant project payback times represent a waste of taxpayer dollars for construction and renovation projects.
However, one could also argue that wasting money is one of the purposes of the law. Environmentalists advocate the program as a small step toward meeting the state’s “net zero” carbon goals. But the program’s most ardent supporters are contractors, businesses and unions who see the GET program as a way to increase construction budgets to benefit themselves and their members. Electricians’ unions lobbied for the initial bill, forestry interests expanded it to include wood-based renewables, and clean energy companies lobbied for later extensions to the program.
The legislature is expected to stop the GET program in the next legislative session. In the meantime, the state technical review board, which oversees the program, should reject any project that does not proceed financially.
Unless the program is terminated or reformed, state and local governments will continue to be forced to waste millions of taxpayer dollars on green energy projects that will never pay for themselves.
Eric Fruits, Ph.D., is vice president of research at the Cascade Policy Institute, Oregon’s free-market public policy research organization.
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