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It's Time For The Solar Industry to Put On Their Big Boy Panties! December 31, 2015 12:00 AM | Tagged as Solar Panels, subsidy
WSJ December 29, 2015, Page A14: “Nevada’s Solar Flare” (editorial)
The feel good, green-energy culture has taken a well-deserved thrashing from courageous politicians in Nevada. Governor Sandoval and the Nevada Public Utilities Commission have thrown a wrench in the pseudo-economics for residential solar panels.
The issue is the inappropriate scheme to force utilities to pay for excess generation from solar panels at the same retail rate that the utility charges solar-panel homeowners when the sun isn’t shining. That seems fair on the surface, but it is far from fail when you understand the reality of electric generation and its delivery.
If Homeowner A wants to sell power to Homeowner B, fine. Let them dig a trench and connect the systems together. That would only cost tens of thousands and would pay off in only about fifty years, if not longer. Alternatively, they can put their excess power on the grid and have it automatically available to their neighbor. However, the current system of reimbursement does not require Homeowner A to pay the utility company for their delivery service. Here’s the revelation: The cost of using this delivery thing -- called the grid -- is about twice as expensive as the actual energy being consumed through it.
Power flowing from Homeowner A to the utility at a retail rate represents a subsidy for the Homeowner of which he does not deserve. The home owner does not pay for the grid services.
This is a prime way the solar companies get away with taking the investment tax credits and other advantages which might otherwise be given to the homeowner. Until now, the solar industry in Nevada has been subsidized by all rate payers, particularly the lower income customers. So, the current scheme, called net metering, means the poor subsidize the rich. The whole business is nothing but corporate cronyism, wherein large companies including many banks who invest in these solar companies make a killing. The poor get to help the rich get richer. According to this editorial, Nevada PUC estimates non-solar customers subsidize their solarized neighbors about $623 each year.
Congrats to the lower income users of electricity in Nevada. Thanks to the state PUC and the Governor, they no longer will be funding their rich neighbor’s green machine. It is time for the solar industry to live on its own merits and stop ripping off others with their subsidies. Other states should follow suit.
[Although opinion is included, The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training.]
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