Given the high cost of solar power production, we were puzzled by a recent claim that solar energy will soon be far cheaper than nuclear energy.
As it turns out, there was a big "if" attached to that claim.
A Duke University study said that by 2020, it will cost only 5 cents to produce one kilowatt-hour of solar power. By contrast, it said that production of energy at new nuclear plants will cost an alarming 30 cents per kilowatt-hour by 2020.
But the claim that solar power will be cheap rests on an assumption that is not at all "cheap" for taxpayers: The Duke study said solar power will get less expensive in large part because of help from federal and state tax breaks, the Times Free Press reported.
But wait a second: Who pays for those tax breaks? You do, with your tax dollars, or else future generations of Americans do as government borrows money to fund the tax incentives.
So is that truly making solar power "cheap" - or is it just a shell game that saddles taxpayers with hidden, higher costs for energy? For the record, the U.S. Department of Energy estimates that unsubsidized solar energy would cost nearly 40 cents per kilowatt-hour, and that energy production at new nuclear plants will cost about 12 cents per kilowatt-hour.
Government can hide the actual cost of a good or service by subsidizing it, because taxpayers do not get an itemized list showing exactly where every one of their tax dollars goes. That means you pay for agriculture subsidies or energy subsidies or even passenger rail subsidies without necessarily realizing it. But that is not truly reducing costs, it's just imposing those costs in less visible ways.
Do nuclear power producers get some loan guarantees and other "help" from the government at potential losses to taxpayers if they fail to repay those loans? Yes, and we are not going to say that one energy sector should get government aid while another doesn't.
They all ought to produce energy in the free market without subsidies, letting customers decide with their dollars which type of energy they prefer. It's silly to pretend that subsidizing energy or any other sector of our economy makes goods and services "cheaper." It may hide the true costs of goods and services, but it doesn't make those costs go away.