The not-so-sunny truth about rooftop solar subsidies


This week The Wall Street Journal printed an op-ed “The Hole in the Rooftop Solar-Panel Craze.” The bottom line of the article is clear, “Without subsidies, rooftop solar isn’t close to cost-effective.”

This is something that free market advocates have been saying for a long time. Policies that promote solar over cheaper more affordable alternatives shift cost to everyone else. Subsidies keep solar prices low enough to look like they’re more cost effective but the fact is they’re not.

Here’s an eye-opening excerpt from the piece:

Increasingly, utilities across the country have been calling attention to the problems with rooftop solar. They’ve been urging the pursuit of large-scale solar and other renewables, the moderation of rooftop-solar subsidies, and a restructuring of electric rates to encourage new technologies. They’ve been vilified by armies of PR consultants armed with sound bites about how utilities want to kill solar.

Yet the federal subsidies for solar amount to about $5 billion a year, with more than half of that amount going to rooftop and other, more expensive, non-utility solar plants. If the federal government spent the $5 billion instead subsidizing only utility-scale solar plants, I estimate that it could increase the amount of solar power installed in this country every year by about 65%. And without net metering and all of the other nonsensical state and local subsidies for rooftop solar, we could save this country billions of dollars every year.

I’m all for free-market, unsubsidized or non-mandated solar. If you want to put panels on your roof and then pay your fair share of the grid go for it. I just don’t want to pay increased costs for my neighbor’s choice.

Don’t worry; my aversion for paying for other people’s personal choices isn’t limited to energy. I’m all for you driving a beautiful BMW or the latest Lexus if you can afford one, but while I drive a 12-year-old Chevy I don’t want to subsidize the cost of your new car.

More specific to the energy discussion and analysis, I don’t want to pay more for you to put premium unleaded gasoline in your luxury sedan. That’s your value judgment. And I applaud your ability to make it because it’s the American way. But it’s not fair and it’s not right for the elderly person on a fixed income trying to fill up behind you to pay more for their gas because of your personal choice. That’s also the American way. We are responsible for the actions we take and the products and services we choose. Our choices should have as little impact as possible on the next person, and that’s the crux of this debate.

Oh, and by the way, that regular unleaded 87 octane gasoline I’m putting in my Chevrolet meets all federal regulations for clean air.

There are groups in Alabama who will cry foul at the reality of the solar situation. They’ll say that if you take the free-market position you must be for big utilities. It’s as if those who support solar subsidies and mandates think consumers are too dumb to do simple math or are too naive to question the actual motives behind those pushing for more and more tax incentives that benefit an industry that otherwise couldn’t stand on its own.

I’ve heard all the arguments before but the fact is if environmentalists really wanted to create change in the utility market, they’d promote utility grade solar based on a free market.