THE CASE AGAINST PRIVATE UTILTIY INVOLVEMENT IN SOLAR INSTALATION PROGRAMS
In recent days we were going thru some old files and we found this article that was published in the December 77 issue of Solar Development Association newsletter. A newsletter funded by some friends of mine in Tucson, Tab Prizer and Tom Van Ravensway, when I was working for Congressman George E. Brown, Jr. It was written by The Union of Concerned Scientists, an organization of very prestigious scientists and concerned citizens (about 250,000 of them). It was begun at the Massachusetts Institute of Technology in 1966.
You can read it in full by clicking here (attachment coming tomorrow 8/23/10)
Here is a summary of what it said you may be surprised:
“During the past year, a growing number of the nation’s private utility companies have launched programs to install units in the homes of their residential customers. To date most of these programs have been undertaken either at the urging of state regulatory commissions or at the initiative of the individual utility. The utilities are the logical group to provide this service, it is argued, because of their access to the large sums of capitol needed to start and maintain such programs.
While there may be some merit in some of the “pro” arguments for such utility involvement in solar projects, a full debate of the merits and demerits of such involvement has yet to occur. To date, there has been no public discussion of the “con” arguments. In the interest of fostering full public discussion of this issue the Energy Project of the Center for Science and the Public Interest in Washington D.C. has prepared an analysis of some of the problems that will be encountered. A summary of the analysis follows:
Excessive Profit Taking: Under proposed leasing schemes, the utilities would be in a position to realize a substantial profit. They were allowed a 17% return on their investment for customer insulation programs. If this is allowed for solar it could make solar seem less economically competitive (and possibly completely non-competitive) with nuclear and fossil fuels.
The report seems to imply that some utilities take solar incentives (the tax payer’s money) to help pay for it and then use the construction of that same system as an excuse to to get the state regulatory commission to increase peoples utility rates and perhaps to gain favorable public opinion for having built it.
Monopolization/Favoritism: Utilities could swiftly monopolize the solar energy field and drive out the small solar industries from the business. By giving just a few companies the lion’s share of the business rather than spreading around their purchases, the utilities could effectively decide which solar companies will be allowed to continue in business.
Increased Costs to Consumers: Invariably , as the utilities move into the solar product fields, they will justify investments in this area warranting increases in administrative cost as well associated with program R & D.
Homeowners Would Pay Twice: In a case where the utilities sell and install systems they would receive the government subsidies. The result would be the homeowner paying doubly for the equipment/materials through taxation as well as paying to rent/purchase from the utility. (see comment above – Excessive Profit Taking)
Lack of Accountability:The utilities have an essentially captive market. The only way customers can effectively impact a utilities’ policies is through a rate hearing before a state regularly commission. However such proceeding are complicated, time consuming and very expensive making them unviable for most customers. Accountability is vital in any program that can have an effect upon their future energy decisions and directions.
Lack of Commitment to Solar by Utilities: Utilities themselves are maintaining the posture that solar technologies will not play a a major role in the nation’s energy picture for years to come. They have expressed continued preference for not exhausting their nuclear and fossil fuel options before going solar.
Social/Political/Ethical/Considerations: Placing control of solar commercialization efforts in the hands of the utilities is to entrust the nation’s future to the same decision makers who have given us nuclear reactors, plutonium breeders, polluting coal plants, coal gasification facilities, all electric homes, and inverted rate structures. Moreover, utility involvement in such programs (solar) will only be viewed by those companies in terms of how it will benefit them, regardless of whether decisions they make will have a negative impact on the balance of society. For example, in testimony before Congress utility officials outlined the reason they had for for entering the solar market. These reasons included 1. Providing a new business opportunity which would offset the inevitable reduction in utility sales and (2) Providing utilities with “access to capitol (federal [and state} grants, ) that would not (otherwise) be available.
Solar Technologies are Inherently Decentralized: The utilities owe their existence to a history based upon the development of large, expensive, and complex technologies. By comparison, though, solar technologies are simple, relatively low cost, and suited to dispersed, decentralized applications.
There are Alternatives: The primary argument of involving he nation’s utilities in solar programs has been that there is no viable alternative for the efficient commercialization of these technologies. There are other options. For example communities owning municipal utilities a far more accessible to the public. Further they do not have a profit motive. A second option would for the city governments themselves to establish community co-ops (with the assistance of federal seed monies) they could purchase large quantities of solar systems. These systems could then be sold to local residents at cost. Third option is to rely on the industries themselves that are manufacturing and distributing the solar systems to institute leasing programs. There is no need to add a middleman to the leasing scheme. A forth option would be to fund Community Action Programs so they can broaden their programs to include all residents of their programs, not just the low-income.
This is a Decision for the Legislature: The involvement of the utilities solar programs could have ramifications for years to come. It is a decision that is is far too significant to be entrusted to the discretion of the individual utilities or to state regulatory commission or to any administrative agency (federal, state or local). Decisions regarding utilities in involvement in such programs are properly decisions to be made by state legislatures (and possibly the Congress) only after extensive and thorough public debate. It should also be part of a fuller effort to secure substantial reform of utility rate structures and decision making procedures.
End of Summary:
Comments: If these large expansive multi-megawatt systems (solar utility plants, solar farms, various large scale commercial solar utility projects) covering massive amount of land were kept on the rooftops of our buildings where the solar generated electricity is to be used i.e. (homes and business) it would be not only be better but a ton more fun. 1. It would not destroy even more wildlife habitat, good farm land, etc.. 2. It would not require even more ugly looking massive and extensive power towers and cable crossing over the country to even more ugly transformer stations and then into the ugly telephone and power lines that visually pollute our neighborhoods and cities. 3. It would be more electrically efficient as it would reduce electrical loses coming from miles away. 4. It would provide 100 times more jobs, I suspect. 5. It would bring the cost of solar down because the involvement by the people (people don’t even see or learn the first thing from these solar utility plants (they are usually in the middle of nowhere surrounded by barbed wire) until we get the rate hikes because of them). 5. It would simply our lives.” Solar systems are like tinker toys compared to power plants”. One utility power plant engineer told me one time. 6. It gives control of a vital part of our survival, electrical power, back to those who depend on it.
Every time someone asks a question to a utility company about solar there is no one there to tell you how it works and it is so simple. Every home and every business is literally a solar school. The homeowners and most business owners are proud of their systems and would live to talk to you about them. We’ve been using it for 3 years (yes we had to make some adjustments, learning curve) but it is so simple (panels on the roof, wire comes down to inverter, inverter may or may not connect to a battery bank, inverter is connected to the Utility ) and its that way for every solar system in the country. It’s generally surrounded by enthusiasm and motivation. Go look at one. No moving parts, simple to design and install, and the panels and inverter are so tough that no one has lived long enough to know how long they will last in real time. Its all guaranteed for 25 years and well, what are we waiting for and why would you want to give this all away to the utility companies, I just don’t get all this grid-tied mentality. Sure grid tie it if you want to but at least include a few batteries so you have basic necessities every day even if the power never comes on again for months or years. The only parts you have to replace are the batteries (they can last from 3 to 10 years depending how you maintain them) and then you can enjoy electrical independence.
Look, thank god for the utility companies we obviously owe them a huge debt of gratitude. I also believe it when FPL says that we have some of the lowest rates in the nation. That’s great.
But I worry about nuclear power because of my son. It’s more about the nuclear waste than the plant.
This is an old report, 1977 but it still has significant arguments in it valid today.
We are also trying to make arguments for solar to make money, there’s nothing wrong or illegal with that. our sales pay the bills just like a utility company so we you can understand.
Solar hybrid (mix it with natural gas, utility back up, generators, even), it seems the more you can afford without getting too complicated along with reducing the electric power you use is the best way to make your own electrical system cost effective and you electrically independent.
Thank you.
John
