Repercussions

As readers of my blog will have noted, I am a staunch supporter of clean energy. In fact, I selected a number of “heroes” on the basis of their contributions to saving the planet and have strong feelings about the unfettered greed that is Big Oil and giant corporations generally. But a New York Times article recently raised an interesting issue that is worth reflection. As the solar industry grows and prospers those who cannot afford solar energy are paying a price. Those who are able to install solar collectors on their homes and businesses are now able to sell some of the energy back to the power companies. But this cuts into the profits of the power companies who are starting to complain — and pass their losses along to the remaining customers. As the article says, focusing on a particular solar customer,

Mr. Burman says the credit system, known as net metering, is a “very nice benefit” for him. But it’s not such a good deal for his utility, Pacific Gas and Electric.

As he and tens of thousands of other residential and commercial customers switch to solar in California, the utilities not only lose valuable customers that help support the costs of the power grid but also have to pay them for the power they generate. Ultimately, the utilities say, the combination will lead to higher rate increases for everyone left on the traditional electric system.

In a word, as those at the top end benefit, those on the bottom suffer. It’s an old story and a sad one. There are a number of things that can be said about the problem, however,  starting with the obvious point that the situation is temporary and eventually, if we hang in there, the benefits will be passed along to all. Renewable energy is a benefit not only to customers, but to everyone on this planet. But the notion that some should make sacrifices now to benefit all later on is suspect — especially when a few benefit immediately and many of those who cannot afford solar panels are made to pay increased energy prices. It’s a certainty that the energy companies aren’t going to take a loss!

Of course, a great many people will claim they cannot afford to install solar panels though they simply have different priorities. Higher energy costs will provide an incentive for those people to do the right thing. But there are many who really cannot afford the conversion and those are the people who are being hurt by the move to solar and wind. There is, of course, a solution.

As things now stand, Big Oil gets anywhere from $10 billion to $52 billion a year in subsidies from the U.S. government (estimates vary).  I’m not sure why, but it doesn’t really matter. Suppose those subsidies, or even a part of them, were transferred to the clean energy industry!  Unfortunately, as we all know, those in Congress who might vote to change these subsidies are in the pockets of the oil and gas industries and aren’t about to change their thinking. In fact, President Obama failed recently to cut $4 billion from the subsidies. But if those in Congress somehow could be prevailed upon to do so, those subsidies might be shifted to the clean energy industry to allow companies like Pacific Gas and Electric to maintain current costs to customers with low incomes while the solar industry gets a toe-hold and is able to bring its costs down to levels affordable by all. In other words, the subsidies that now benefit Big Oil could actually benefit the country as a whole. The power companies could cut their losses by buying into clean energy (hey, we’re imagining here!).

Wouldn’t that be something? A government that works for us instead of them! Do I think such a thing will ever happen? Of course not. But I can dream, can’t I?

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6 thoughts on “Repercussions

  1. Absolutely. I love this idea. I can’t believe the break that big oil gets. Obviously, this could be a tough hill to climb, but at some point, even Congress will have to agree that we need to do something to encourage other options.

  2. Good article. Being in NC, I liken the argument to the cigarette tax. Our energy policy should incent renewables and disincent fossil fuel use. If energy companies don’t move down the renewable path, others will leave them behind.

    • In Minnesota the state required the largest supplier of energy to invest in wind power in exchange for permission to continue to produce nuclear waste. A strange exchange! But it make take state and federal intervention even though I would think the power complanies would realize it’s just good business.

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