Posts Tagged ‘subsidies’
You know that 30 year old living rent-free in his parents’ basement? The one who got straight A’s and has a graduate degree but fails to make it in the real world? Well, in the energy sector, that’s the solar industry.
Proponents of solar insist on government subsidies and regulatory climates favorable to solar at the expense of traditional energy sources. For decades, the argument has been that government investment will help solar to launch. Yet, just like the overly-indulgent parents of the millennial basement dweller are actually impeding his development, so too are solar proponents creating an entire industry that cannot function in the marketplace.
Take for example SolarCity. Last month, SolarCity was “forced to eliminate more than 550 jobs in Nevada” after the Public Utilities Commission (PUC) decided to end “net metering.” Net metering is a program that pays retail price for excess power that solar users send back to the electrical grid. SolarCity built their entire business model upon this program, providing solar panels to its customers at no initial, upfront cost and then pocketing the government subsidies.
As the Wall Street Journal pointed out in December, SolarCity was aware that depending upon net metering for the long-term was a risky gamble, telling investors “our ability to sell solar energy systems and the electricity they generate may be adversely impacted by changes in net metering policies including reductions in the amount or value of credit that customers receive through net metering.” According to Nevada’s PUC, solar users in Southern Nevada receive a $623 subsidy per year, while those in the northern part of the state receive $471—paid for by the non-solar ratepayers who are typically lower income.
To believe that this ruse would continue forever and build a business upon it was just foolish. Those who argue for continued subsidies for the solar industry enable the irresponsible decisions that hinder solar’s growth. If a solar company cannot make it in Nevada or Arizona or other Western sunshine states without considerable subsidies, it can never make it as the viable energy option that solar proponents purport it to be. Let’s end these subsidies everywhere and force innovation in the solar industry to become self-sufficient. After all, if you truly love something, shouldn’t you set it free?