Solar Subsidies: Crony Capitalism Amounting to Class Warfare
Throughout solar technology’s checkered history, one thing has remained constant: It’s not a cost-effective way to generate electricity.
Despite technological advance and even falling prices for solar panels, that unfortunate reality remains true.
For that reason, environmental activists and political liberals have succeeded in creating a complex array of local, state and federal subsidies to prop it up – funded by your hard-earned tax dollars. Solar simply cannot compete as a power source without distorting the market through generous government subsidies.
To be clear, we at CFIF maintain no arbitrary animosity toward solar energy itself, or any form of energy for that matter. We believe, however, that American consumers and taxpayers should remain aware that certain fashionable forms of energy – conspicuously available to only some people – are subsidized in whole or in part by wasteful government spending. By now we’re all well aware of the danger when government power is used to pick winners and losers in the market, but solar subsidies constitute a particularly bad example. Artificial favoritism toward the solar sector has benefited rooftop solar users at the expense of taxpayers and consumers who don’t or can’t utilize solar.
Here’s how that distorted scheme works.
Favored homeowners exploit a generous 30% federal tax credit and other bureaucratic incentives to install rooftop solar systems. Afterward, utility companies must then repurchase the excess power generated by the solar panels at full retail price under a policy known as “net metering.” That, in turn, allows rooftop solar users to enjoy the benefits of traditional electrical generation, and the grid that distributes electricity, without contributing to the broader costs associated with keeping the lights on, so to speak. Meanwhile, consumers without solar remain on the hook for the maintenance of the electrical grid.
There’s an ugly irony that seems to have escaped most liberals who advocate that system of subsidies. Namely, most consumers remain unable to exploit the system of handouts because they can’t afford solar in the first place. Accordingly, liberals have created a government subsidy in which middle-income and lower-income consumers end up subsidizing wealthier homeowners. How’s that for class warfare?
Just as unseemly, the solar industry and activist groups actually claim that solar subsidies promote “choice and competition.” The reality is that the solar industry and its advocates simply seek favored economic status via crony capitalism. Using bureaucracy to elevate the solar sector doesn’t promote choice or competition. It’s simply government picking winners and losers – with everyday consumers paying the price.