by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
If your business model requires ongoing subsidies and incentives, your business isn’t selling a product, it’s having to lobby nonstop. ZeroHedge reports on a major new threat to the rooftop solar business in California:
As part of a proposed series of changes issued on Monday by a judge at the California Public Utilities Commission, residential solar customers would receive a much lower credit for excess energy sent to the grid – with credits ranging from around 30 cents per killowatt-hour, to less than 10 cents depending on time of day.
The proposal would also stick solar owners with nearly $500 per year in grid-connection fees.
That would upset the whole net-metering scheme, whereby 1.3 million Californians with rooftop solar receive bill credits worth the full retail price (not wholesale) of electricity for “excess electricity” they send back to the grid regardless of electricity need.
As you can imagine, only a certain class of consumers can do this: the wealthy. The poor, especially renters, can’t. They’re stuck not only paying full retail price for their electricity, but also subsidizing “buying electricity back” from the wealthy.
In Southern California, providers SDG&E and SCE jointly proposed a sharp decrease in solar subsidies, as well as a monthly connection charge approaching $100 – changes the utilities claim are necessary to make sure ‘solar users pay for their fair share of the costs of maintaining and upgrading the power grid.’
“It’s a reverse Robin Hood situation,” said Matthew Freedman, an attorney with California ratepayer advocacy group The Utility Reform Network (TURN), adding “And so we ask ourselves, ‘Should we be providing the largest subsidies to the richest customers in the state?’“
Naturally, the solar industry objects.
“Solar companies would go out of business in towns all over the state and the market would plummet” if things such as monthly fees are adopted, according to Brad Heavner, policy director for the California Solar & Storage Association.
Charging people who are used to getting things for free has a tendency to significantly reduce consumer interest in the formerly free stuff.