The market and solar

For the Bloomberg analysis of the Nevada net metering dispute, go to www.bloomberg.com/features/2016-solar-power-buffett-vs-musk/

When the Nevada Public Utilities Commission (PUC) raised the monthly connection fees and reduced the compensation for distributed or rooftop solar power that homeowners would be paid for selling excess power to Nevada Energy from retail to wholesale rates in December, the solar industry in Nevada went into panic mode. At least three major companies are leaving Nevada, and others are cutting jobs.

The Alliance for Solar Power and the Libertarian Party of Nevada circulated a petition to remove the PUC members who voted this in and restore the incentives. I wish I could join my Libertarian Party friends in this, but I believe they are wrong.

Certainly everyone wishes the government would keep its word, but ask any Native American if they believe government is trustworthy. There are no legally binding contracts with the state. Sure, petitions or elections may sometimes work, but that is far different from enforceable private contracts.

Solar power is simply not ready for the marketplace without massive government subsidies. The list of subsidies is long and complicated. There are numerous websites devoted to figuring them out, and dedicated solar installers standing by the phones to crunch the numbers for you if you can’t figure it out yourself.

Here is a short list of major subsidies:

1. Property Tax Exemption. Any value added by a home solar power system will not be included in the assessed value of your home, and therefore your property taxes will not increase.

2. PACE Financing. Property-Assessed Clean Energy (PACE) financing allows property owners to finance the purchase of a home solar power system through a special assessment on the property.

3. Net-Metering. With the latest amendment in 2007, Nevada’s net-metering laws allow home solar power systems up to 1MW to join.

4. NV Energy Renewable Generations Rebate Program. This program is run by NV Energy. It is offered to solar, wind and hydro systems. It was established in 2003 as a result of Assembly Bill 431 (“the Solar Energy Systems Demonstration Program”) and began in August 2004.

These are on top of the federal tax deductions and low cost loans offered to solar power companies and homeowners. The list also includes the Nevada Renewable Energy Portfolio, which is the mandate to increase power derived from renewables in Nevada, special licensing breaks for solar installers, green building requirements that cover both state and private buildings, Nevada sales and use tax abatements, etc.

I can sympathize with Nevada Nuclear Waste Task Force director Judy Treichel and others who complain that they invested their hard earned money in solar energy as part of their retirement plans to save energy costs. I can also sympathize with owners of municipal taxi medallions that are now made worthless by Uber. But both Ms. Triechel and the medallion owners made the choice to invest in the monopoly power of the state rather than in the (relatively) free market.

Nevada Energy says that solar power subsidies cause non-solar users to pay more for their electricity. Undoubtedly, NV Energy wants to build their own solar-powered generation plants and reduce the incentives for distributed power. Let the birds burn!

There is no “right” to solar power. Government subsidies are a privilege, not a right. Libertarians should support a mandate and subsidy-free energy market, and should advocate the end of the progressive model of regulated monopolies like NV Energy, so consumers have real choices in who provides their energy needs.