Is solar power really good?
The Moon Jae-in administration’s shift to renewable energy _ a particularly heavy focus on solar power _ faces unexpected backlash as the generous government subsidy for the energy source is bringing about serious side effects.
As part of its efforts to reduce dependency on fossil fuels and nuclear power, the government unveiled a plan last month to spend 110 trillion won ($103 billion) to build more solar and wind farms nationwide by 2030. Among them, 70 trillion won will be poured into solar power.
However, critics say such an energy plan will only lead to benefit the rich as the taxpayer money is feared to end up in their pockets, according to the policy system.
As it is still expensive to generate solar power, governments across the world offer subsidies. A controversial issue here is that a large number of low-income households cannot benefit from the government grant because only homeowners are eligible for the payment.
Installation of a 260-watt solar panel on apartment balconies costs 600,000 won, but the Seoul Metropolitan Government, for example, has begun to provide subsidies, cutting the cost to 100,000 won to 150,000 won. To this end, Seoul has spent nearly 4.4 billion won on its residential solar power system.
According to the Seoul government, the photovoltaic panel saves 60,000 won to 70,000 won per year in power fees, helping those homeowners recoup their investment after two years.
The grant is unexpectedly driving up land prices in rural areas amid investment crazes, as well.
Some coastal areas of South Chungcheong Province and South Jeolla Province, the sunshine of which is 10 percent more than the national average, have seen an almost two-fold jump in their land prices over the last month.
Some say solar power is believed to achieve annual returns of between 8 percent and 10 percent over next 20 years, so many retirees are rushing to provincial areas to run solar farms. When they are putting their money in savings account, the annual interest rate is around 2 percent.
Anyone who wants to earn a decent living from such an investment should own 5,000 square meters of land with long sunshine hours and the financial leeway necessary for the investment including licensing costs. The investment totals 2 billion won, which is no small sum for most people.
Under the feed-in tariffs (TIFs) scheme, the government rewards people for generating solar power. The scheme is designed to accelerate investment in renewable energy technologies.
Should the government stick to the current generous solar power policy, it may spawn an unintended result of making the rich richer, critics warn.
In addition, the excessive subsidy is feared to block innovation _ entrepreneurs may stop developing advanced facilities because they can easily rely on state subsidies.
“Products for solar power are of the standardized design, size and capacity and it is mainly due to the government subsidy that covers 75 percent of the installation cost,” Lee Ki-kwan, president of Micro Powerstation, a supplier of urban solar power systems, said in a seminar organized by Seoul Energy Corp. last month.
“Who will spend their own money to expand the renewable energy, while the government offers the grant?”
According to the Ministry of Trade, Industry and Energy, the government aims to increase the ratio of renewable energy from the current 7 percent to 20 percent by 2030. The increase will allow renewable energy output to reach 63.8 gigawatts, which is the equivalent of electricity produced by 46 nuclear reactors.
To achieve this goal, the ministry vowed to acquire new clean energy sources capable of providing 48.7 gigawatts.
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