It's Time for Real Competition in Solar Markets
Over the last few years, numerous pieces of legislation have been introduced, and some have passed, intended to address utility companies' concerns over grid reliability in the face of dwindling customer demand. A recent article in the Albuquerque Journal raises new allegations, lambasting solar companies for irresponsibly fleecing consumers, painting rooftop solar as a foolhardy investment intended to suck homeowners dry while lining the pockets of solar executives.
Frankly, the risks inherent in solar contracts are no different than risks in other long-term contracts. Any long-term financial commitment deserves careful scrutiny on the part of the consumer. Obviously, regulators should put rules in place to root out fraud. Should solar companies be held accountable for offering clear contracts? Yes. But should consumers also be expected to do due diligence when engaging in a large investment? Also yes. In the end, purchasing rooftop solar is in no way a uniquely dangerous transaction that deserves a higher level of attention.
The troubling portion of the solar industry is government favoritism, whether in the form of subsidies, tax credits or regulations mandating solar's use. Utilities have spent years crying foul, pointing out the ways they've invested over time to provide reliable power in a highly regulated environment, only to be upset by a new power source made competitive by incredibly generous subsidies. But the truth is more complicated. Utilities enjoy a broad variety of state supports and have enjoyed the benefits of being a government-granted monopoly. It's high time that competition came to the energy sector, ending subsidies and favorable treatment for everyone.
Utilities have a legitimate concern that increased rooftop solar will undermine grid reliability, increasing prices for consumers. Regulators should take this issue very seriously and work to find a solution that ensures access to power while still allowing competition. Unfortunately, rather than dealing with the actual root issue, states are pursuing a variety of paths to limit solar's implementation, erecting barriers to entry, prohibiting certain financing mechanisms or imposing arbitrary fees.
It's regrettable that solar is subsidized, but the answer isn't to make further regrettable decisions out of spite. We should work to end all energy subsidies, while regulators address the true problems, like ensuring grid reliability.
Lori Sanders is outreach director and senior fellow at the R Street Institute. This piece originally appeared on the institute's blog.