Even in Louisiana, where fossil fuels have long been the dominant energy source, utilities and industrial power users continue to place more emphasis on tapping a renewable power supply — whether forced to do so by regulators or driven by environmental reasons.
The Legislature has been asked to consider policy to pave the way for alternative energy, which has led to some resistance from lawmakers with deep ties to oil and gas. While legislation for wind energy infrastructure has been embraced, thanks to its overlap with offshore exploration, solar energy hasn’t enjoyed the same warm welcome.
This was evident during a joint meeting Thursday of the House committees on Agriculture and Natural Resources on solar energy development. Summoned through a study resolution approved earlier this year, the hearing was rife with misinformation, unsubstantiated statements and contradictory data.
The Illuminator researched some of the most noteworthy claims made at the hearing to determine their accuracy and provide factual evidence to support or refute them.
Claim: Federal subsidies for renewable energy have created an unlevel playing field in favor of the renewable energy industry, according to Louisiana Department of Agriculture and Forestry Commissioner Mike Strain.
Fact check: Mostly false and misleading. While it is true that direct federal subsidies for renewables are currently greater than those for conventional energy sources nationwide, it is not the case for Louisiana and has only recently become the case in many other states.
Louisiana has received $156 million in federal solar subsidies under President Joe Biden’s Inflation Reduction Act, the major source of federal clean energy funding. This amount is small compared with the roughly $1.6 billion in state tax subsidies that Louisiana hands out to the oil and gas industry each year, according to Louisiana Department of Revenue data.
That amount doesn’t include fossil fuel subsidies from the state’s most lucrative incentive, the Industrial Tax Exemption Program.
Nationwide, about 53% of federal energy subsidies were associated with renewables, including biofuels, according to the U.S. Energy Information Administration. About a third of that share, or roughly $7.5 billion, has gone to solar. That includes direct payments such as grants and agency spending, as well as indirect incentives such as loans and tax breaks.
Federal subsidies for conventional energy sources — such as coal, nuclear power, natural gas and petroleum liquids — have reached about $5.3 billion per year. However, the natural gas industry has received the lion’s share in direct payment subsidies, amounting to $103 million in 2022 compared to $27 million for the solar industry, according to federal data.
Claim: Strain said some banks and activists have forced large companies to purchase expensive renewable energy by pressuring corporate board members to adopt environmental, social and governance (ESG) policies. Those purchases, he claimed, turned out to be poor investments because conventional fossil fuels are cheaper. Corporate boards are now reversing their ESG policies after realizing they have a fiduciary responsibility to their shareholders to not waste money on politically motivated initiatives, Strain said.
Fact check: Partially true but misleading. Activist shareholders have managed to influence some companies’ investment priorities, and investment banks have created ESG funds that bundle stocks from companies that, for example, have smaller impacts on the environment or greater workforce diversity.
However, many ESG funds and policies, for the large part, are branding opportunities to try to attract new customers by letting them choose investments that align with their personal values. Most of the political pressure and legislation on this issue came from conservatives after the U.S. Securities and Exchange Commission said it would require companies to disclose whether climate change poses a risk to their long-term financial positions.
The Illuminator could not confirm any individual companies have lost money on renewable energy investment.
Strain referred to John Deere as a recent example, but there have been no reports of the company losing money related to ESG policies. John Deere made headlines when it removed “socially-motivated messages” within its employee training manuals following targeted backlash from conservatives. Some companies have continued their core commitment to ESG and diversity, equity and inclusion (DEI) policies, but some have simply dropped the acronyms or renamed the policies.
Claim: The wind and solar industries would effectively collapse if not for federal subsidies because renewable energy costs much more than fossil fuels.
Fact check: False. Rep. Danny McCormick, R-Oil City, made such claims throughout the meeting. He refused to accept testimony that refuted them from one of the state’s leading economists on the subject, Greg Upton, director of LSU’s Center for Energy Studies, who said utility-scale solar is the cheapest form of energy even without federal subsidies.
“That’s contrary to everything everybody else said in the world,” McCormick said, adding that Upton’s department receives funding from the solar industry and accused him of having a financial incentive to reach certain conclusions.
Upton cited other research that’s reached the same conclusions and said the center receives a lot of money from oil and gas companies, too.
It’s unclear where McCormick got his information as he didn’t mention a source, but news of renewable energy’s cost competitiveness is relatively old. Average power purchase agreement prices for solar supplanted the cost of burning fuel in existing natural gas units nearly a decade ago, according to a 2023 study from the Lawrence Berkeley National Laboratory.
Onshore wind began undercutting all fossil fuels by significant margins in 2014. Utility-scale solar joined wind at the top of the affordability rankings a few years later, and they remain nearly tied with each other for being the cheapest forms of electricity — 33% lower than natural gas — even without government subsidies, according to a 2024 study by the financial firm Lazard.
Claim: Louisiana utilities could generate cheaper electricity using natural gas, but it’s being shipped overseas. As a result, utility companies are forced to buy renewable energy.
Fact check: False. McCormick asked about this after Upton tried explaining how oil and gas markets are global and largely unaffected by domestic factors such as the increase of solar developments in Louisiana. Upton said solar electricity isn’t a direct competitor to oil and gas companies that make most of their money on the global market.
Utilities are not being forced to use renewable energy. Rep. Jerome Zeringue, R-Houma tried to clear up the confusion, explaining that utilities purchase the lowest cost wholesale electricity through the regional grid operator regardless of how it’s generated. When they’re purchasing renewable electricity, it’s simply because it’s the cheapest electricity available at that time and not because they’re being forced to do so, Zeringue said.
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Claim: Solar’s use of land poses a risk to the state’s food supply, which is dwindling because people are eating more food than is produced.
Fact check: Mostly misleading. Strain and others suggested solar could cause severe disruptions to farming, including sugar cane, by taking over a significant portion of the land being used for crops.
“We’re consuming more food than we’re producing,” he said.
Although some studies indicate the world could run out of food by as early as 2050, the problem is not the fault of the solar industry. Rather, it is primarily the result of unsustainable farming practices, wasteful eating habits and, to some extent, climate change.
Unsustainable farming practices such as overuse of fertilizers, intensive tilling and planting the same crop each year have caused severe soil degradation to the point of where land can no longer support plant life, according to the United Nations’ Food and Agriculture Organization.
But even when farms can produce enough food, Americans waste about 30-40% of it, data from the U.S. Department of Agriculture show.
Jim Simon, director of the American Sugar Cane League, testified that Louisiana’s sugar cane industry is fragile. The loss of a few thousand acres in a single area would lead to the closure of a mill, he said. When asked by lawmakers, he could not offer any data to suggest solar farms are displacing sugar cane fields.
Simon’s organization announced last year that Louisiana sugar cane farmers had record-setting yields, producing the most sugar cane in the country.
Upton said that even if Louisiana built enough solar farms to replace every other source of energy in the state — a virtually impossible scenario — those solar farms would still only take up a little over 1% of the state’s land.
