Solar Energy for DOD Installations Diverts Funds from Defense Priorities

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Solar Energy for DOD Installations Diverts Funds from Defense Priorities

May 13, 2016 6 min read Download Report

Authors: Rachel Zissimos and Brian Slattery

President Barack Obama’s prioritization of climate change continues to impose unnecessary costs on the U.S. military. Department of Defense (DOD) energy mandates arising from the Administration’s climate change agenda have established a goal of producing or procuring “not less than 25 percent of the total quantity of facility energy [DOD] consumes…from renewable energy sources” by 2025.[1]

Despite current military modernization and readiness shortfalls, the President’s fiscal year (FY) 2017 budget continues to support funding for many heavily subsidized, expensive, and intermittent renewable energy technologies, including significant investments for solar power projects[2] that contribute to renewable energy mandates at the expense of critical defense priorities and taxpayers. As Congress considers funding for the military for the coming fiscal year, it should repeal this costly energy mandate and focus energy funding on sources that provide the greatest benefit to the DOD.

Renewable Energy Mandates Divert Resources

Not all renewable energy programs are inherently wasteful, but problems occur when political preferences override good economic sense. For example, the geothermal plants at Naval Air Weapons Station (NAWS) China Lake generate more than 1.4 million megawatt-hours of electricity annually at a cost that is competitive with that of conventional energy sources.[3] Although the geothermal plants are situated on a Navy installation, they are privately financed, owned, and operated.[4] In the case of NAWS China Lake, a private company sells the electricity that is generated to California utility companies and pays the DOD royalties in exchange for the use of the land and its resources.[5] By leasing DOD-owned land for private development, the DOD can avoid high initial capital costs and even generate revenue from the lease and associated energy production.[6]

Some of this revenue, however, is used to support wasteful energy programs.[7] Under U.S. law, the DOD must demonstrate direct involvement in renewable energy production or consumption in order for the electricity produced on DOD-leased land to contribute to federal renewable energy mandates.[8] One way to meet this requirement is to use a minimum of 50 percent of the proceeds from the lease to fund other renewable energy generation or energy conservation projects.[9] In financing additional renewable energy projects, these revenues subsidize the development and construction of costlier energy sources, such as solar power.[10]

The DOD further subsidizes renewable energy projects through the purchase of renewable energy certificates (RECs), which enable REC holders to meet mandate requirements for renewable energy without requiring the purchase or production of the renewable energy itself. In essence, the DOD receives credit for meeting renewable energy standards by covering some of the production costs of private energy projects with defense dollars. By reducing production costs, the DOD enables renewable energy producers to provide electricity for an artificially lower purchase price. RECs thereby subsidize the cost of energy available for purchase by the end user.[11]

The DOD, however, receives no direct benefit from the purchase of unbundled RECs beyond their contribution to arbitrary renewable energy goals. These requirements divert money from defense priorities and distort market signals for private development by subsidizing the growth of renewable energy.[12] Despite additional tax incentives, grants, and subsidies, solar power in particular remains significantly more expensive than conventional power sources.[13]

Renewable Energy Mandates Jeopardize Electric Security and Reliability

Even if solar power reached price parity with conventional sources per kilowatt-hour (kWH), obstacles remain in terms of how and when solar power is used. In order for an installation to operate effectively, the amount of electricity generated at any given time must correspond with the level of demand. Since solar power production is tied to a resource (sunlight) that is available only intermittently, production cannot be increased or decreased on demand. In times of low demand, some of the power generated may therefore go to waste. Similarly, at peak demand levels or during times of less sunlight, the amount of energy produced may be insufficient to meet total demand, requiring the installation to employ backup energy from traditional sources like coal, natural gas, and nuclear.

As a result, conventional energy sources are employed intermittently as needed to fill gaps left by solar power, but they do so without a decrease in their fixed operations and maintenance costs, which leads to a higher cost per kWH and increasing energy costs across the board.[14] In other words, reliable sources of energy are run less efficiently for the sole purpose of meeting arbitrary political mandates to accommodate more renewable energy.

While batteries can be used to store excess solar power and meet interim energy demand, it is not an economically feasible option as the cost of batteries for energy storage runs around $500 per kWH.[15] These costs are not included in the DOD’s publicized costs of solar power.

The Administration justifies the excessive costs associated with solar power in the name of energy security, claiming that diversification of energy sources will make the DOD more resilient. In reality, voltage fluctuations that are inherent to solar power can put existing energy infrastructure at risk, resulting in poor power quality and reliability, additional costs, and even safety concerns.[16]

As a consequence, further funding has gone toward grid modernization and microgrid development to improve interoperability of energy sources and reduce the risks posed by incorporating renewables into existing infrastructure.[17] Assessing the viability of renewable energy sources should include consideration of their impact on existing infrastructure and power sources in addition to costs.

Renewable Energy Mandates Are Disconnected from Reality

Finally, the number of DOD installations suited for solar power is extremely limited due to environmental factors and land-use requirements. A 2012 feasibility study across nine DOD installations in the Mojave and Colorado Deserts determined that 96 percent of assessed surface area was unsuitable for solar energy “due to conflicts between solar energy development and military mission activities occurring at the installations,” as well as other factors related to climate and terrain.[18] Only 1 percent of the surface area in the surveyed installations was assessed as “suitable.” While the study determined that over 7,000 megawatts of solar power could potentially be generated across these installations, it concluded that:

The actual level of solar energy development on these installations is likely to remain well below the maximum potential number for a wide variety of reasons, including a shortage of available transmission in the region, environmental constraints that could not be incorporated into this study… and competition from other generation sources.[19]

Furthermore, with respect to the land assessed as viable, the study found that direct DOD funding for construction of solar projects at these sites would be “financially unattractive in all cases.”[20]

Given that many of the most promising installations for solar power have already been determined and contracted, future solar projects are increasingly unlikely to benefit security or create cost savings.

DOD Energy Policy Should Prioritize Military Strength

Investing large sums of money into expensive and inefficient energy initiatives diverts limited defense dollars from where they are needed most and contributes to the continued decline in U.S. military strength.[21] Congress and the DOD should therefore:

  • Require that the DOD factor in all associated costs of alternative energy sources. Solar power cost assessments should include all costs incurred in project development, management, and storage, as well as any infrastructure modifications necessary for the integration of solar power.
  • Eliminate requirements on land lease revenues. DOD should be able to redirect these funds as deemed necessary within the military.
  • Eliminate arbitrary renewable energy goals and prioritize U.S. military strength. Mandating renewable energy production and consumption prioritizes questionable energy security threats above the military’s warfighting capabilities and forces actual defense priorities to compete for funds with the Administration’s climate change agenda.

Using taxpayer dollars to subsidize renewable energy misallocates DOD resources, reduces actual U.S. military power, and obfuscates the true costs and complications of solar power in meeting installation energy demand.

—Rachel Zissimos is a Research Assistant in National Defense in the Center for National Defense, of the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, at The Heritage Foundation. Brian Slattery is Policy Analyst for Defense and Security Studies in the Center for National Defense.

[1] 10 U.S. Code § 2911.

[2] U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller), “FY2017 Energy Conservation Investment Program: Project List,” (accessed May 11, 2016).

[3] U.S. Navy, Energy, “Environment and Climate Change: Geothermal Energy,” (accessed May 11, 2016).

[4] U.S. General Accounting Office, Geothermal Energy: Information on the Navy’s Geothermal Program, GAO-04-513, June 2004, p. 1, (accessed May 11, 2016).

[5] Terra-Gen, The Power of Renewable Energy, (accessed May 11, 2016),

[6] Karen Mouritsen, “H.R. 4458, Naval Air Weapons Station China Lake Security Act,” testimony before the Subcommittee on Public Lands and Environmental Regulation, Committee on Natural Resources, U.S. House of Representatives, April 29, 2014, (accessed May 11, 2016).

[7] U.S. General Accounting Office, Geothermal Energy: Information on the Navy’s Geothermal Program, p. 1.

[8] U.S. Department of Defense, Office of the Undersecretary of Defense (Acquisition, Technology and Logistics), memorandum, “Financing of Renewable Energy Projects Policy,” November 9, 2012, (accessed May 11, 2016).

[9] Ibid., p. 4.

[10] The China Lake geothermal plant alone accounted for nearly half of the DOD’s total renewable energy production in FY 2014; the 645 solar photovoltaic systems operating in FY 2014 accounted for only 11 percent while costing more than twice as much per kilowatt-hour. U.S. Department of Defense, Office of the Assistant Secretary of Defense (Energy, Installations, and Environment), Department of Defense Annual Energy Management Report: Fiscal Year 2014, May 2015, p. 39, (accessed May 11, 2016), and U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2015 with Projections to 2040, April 2015, (accessed May 11, 2016).

[11] U.S. Department of Energy, “Green Power Markets,” last updated March 30, 2016, (accessed May 11, 2016).

[12] Nicolas D. Loris, “No More Energy Subsidies: Prevent the New, Repeal the Old,” Heritage Foundation Backgrounder No. 2587, July 26, 2011,

[13] Carbon taxes also artificially inflate the costs of fossil fuels, making solar power appear more cost-competitive. U.S. Department of Energy, Energy Information Administration, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2013, March 2015, (accessed May 11, 2016).

[14] Mark Febrizio, “‘Grid Parity’ for Renewables: An Empty Concept (Part I),” MasterResource, March 21, 2016, (accessed May 11, 2016).

[15] Diane Cardwell, “Energy Storage Industry Gaining Momentum,” The New York Times, October 25, 2015, (accessed May 11, 2016).

[16] Since solar power continues to be generated even in the event of a power outage, the continued and fluctuating current flow and technical challenges in regulating voltage variations throughout the grid can cause risk of electrocution to personnel working on the grid. See S. B. Van Broekhoven, N. Judson, S. V. T. Nguyen, and W. D. Ross, Microgrid Study: Energy Security for DOD Installations, Massachusetts Institute of Technology, Lincoln Laboratory, June 18, 2012, pp. 36–37.

[17] Microgrids can operate independently of traditional grids, allowing the DOD to operate from local energy production sources. They are generally powered by batteries, renewable energy sources, and distributed generators.

[U] Department of Energy, “How Microgrids Work,” June 2014, (accessed May 11, 2016).

[18] U.S. Department of Defense, Environmental Security Technology Certification Program, Solar Energy Development on Department of Defense Installations in the Mojave and Colorado Deserts, January 2012, p. xviii, (accessed May 11, 2016).

[19] Ibid., p. xxii.

[20] Ibid., p. xxii.

[21] Dakota L. Wood, ed., 2016 Index of U.S. Military Strength (Washington: The Heritage Foundation, 2015),


Rachel Zissimos
Rachel Zissimos

Former Policy Analyst, National Security and Defense Studies

Brian Slattery
Brian Slattery

Former Policy Analyst