September 30, 2015 at 5:00 am ET
There are political charades by hired guns, billions of dollars in loan guarantees and taxpayer subsidies, and advocacy groups funded by Silicon Valley’s mega rich engaging in guerilla-like campaign tactics. This might appear to be a movie or an episode of House of Cards, but this is reality and it’s all in a day’s work for the new Wall Street get-rich scam of rooftop solar leases. At the center of all of this deceit and fleecing of taxpayer dollars is innovative entrepreneur turned subsidy king, Elon Musk.
At the heart of big solar’s worries and Musk’s shenanigans is the policy of net metering, which requires utility companies to purchase electricity from solar power companies. Enacted years ago to spur the growth of distributed generation like rooftop solar, net metering reimburses homeowners with solar panels for the energy they produce. Net metering has become nothing more than a subsidy given to give solar companies as an unfair competitive advantage.
One of the many problems with net metering is that people who sell their power back to the utility company aren’t requited to pay for the upkeep of the electricity grid they’re using. This is similar to a toll highway in which only certain cars would have to pay a toll (those who use traditional electricity) while other cars (the solar users who sell their electricity back to the grid) don’t have to pay that toll. The non-paying cars keep using the infrastructure without paying for upkeep.
Musk is fighting to keep this subsidy to keep feeding his insatiable appetite for more taxpayer money. On the other side is Warren Buffett’s Nevada Energy company, which is arguing for pricing that continues to reward rooftop solar owners who sell energy back to the grid, but not overpay them at the expense of everyone else.
Like many public policies in the technology space, net metering has been slow to catch up with the pace of change that’s occurred in the electricity market. That lag has led to a situation today where there’s a reasonable need to update these policies to bring them more in line with the solar market’s evolution. In this case, the fact that net metering policies are so outdated is actually impairing the very thing that facilitates net metering in the first place: the electric grid.
Accordingly, in many states, utilities charged with sustaining the grid to provide consumers with one of our economy’s most essential commodities have asked that net metering policies be updated to enable the long-term growth of solar – and renewables more broadly – as well as treat all electricity consumers fairly.
Nevada utilities have asked for a modest adjustment in the amount that rooftop solar customers are credited for with their excess solar energy to ensure that these customers are paying their fair share for the cost of the grid, instead of imposing a cross-subsidy upon the rest of the electricity customers in the state. Homes with rooftop solar would still be well compensated for the energy they produce, but would have to give up their free pass on the services that the grid provides – most notably, sending their power back and forth to the grid and keeping the lights on when the sun doesn’t shine.
This seems reasonable for everybody, except for the big solar companies. Instead of working with utilities to come to an agreement that balances the growth of rooftop solar with fairness, rooftop solar companies immediately cry wolf. In state after state, groups like The Alliance for Solar Choice (TASC) and Tell Utilities Solar won’t be Killed (TUSK) deploy the same political cronies and tactics, from aggressive television ads to rallies to protests, to push the tired and untrue narrative that utilities are anti-solar. And, state after state, TASC and TUSK claim that any reasonable regulatory reform will contribute to the “death of the industry,” “eliminate the market,” and is “extreme.”
These claims aren’t surprising, considering the funding sources of these organizations. Crony capitalist companies like SolarCity and SunRun are behind these alleged advocacy organizations and have vested interests in making sure net metering policies stay in place so as not to chip away at their customer base.
The Green Tea Coalition (GTC) is another group being fooled by the false narrative of net metering. GTC masquerades as a conservative group trying to sway state regulators and legislators into agreeing that rooftop solar should be expanded – but, ironically, they advocate that this be done via inflated government programs. And while the arguments of these “conservative environmentalists” may sound appealing to some, they are a farce. In reality, GTC’s cohorts are the complete opposite of conservative, and include groups like the $80 million lefty powerhouse known as the Sierra Club. All this for an industry that receives federal subsidies that amount to about $39 billion a year, but touts that the costs of the technology are coming down.
Rest assured that there’s more to come from big solar’s playbook. Hopefully, consumers and policymakers can begin to recognize these organizations for what they’re worth – crony capitalism at its finest. Like politicians, businesses should be held accountable for their actions, especially when they’re burning taxpayer money. In the case of big solar, this could not be truer.
David Williams is the President of the Taxpayers Protection Alliance (TPA).