Detailing Solar Companies' Dependence on Handouts | Eastern North Carolina Now

    Publisher's note: The author of this post is Jon Sanders, who is Director of Regulatory Studies for the Carolina Journal, John Hood Publisher.

    RALEIGH - There's a corner in my house that is highly attractive to cats. In a few short years, this place has gone from somewhere no cat would ever be seen to an area heavily visited by kitties. One might describe this spot as an Emerging Leader in Cat Corners.

    If you wrote a report about it, you could graph the surprising rate of growth in feline frequenting of this one little corner in one little house in the neighborhood. You perhaps might impress media with the seriousness of this as a Real Cat Miracle.

    Were you inclined to give the full story, you might also mention that I have used family income that could have gone to other purposes to purchase cats. And that I chose this one corner in the house for their food bowls. And that to fill those bowls I purchase (also with family income that could have gone to other purposes) food and treats made exclusively for cats. And that the cats both know and expect this activity to continue.

    You might even figure out that the amazing attractiveness of the location isn't the location itself, but that it happens to be a spot arbitrarily chosen as a place for sustenance and treats specifically made for creatures artificially placed there.

    In fact, you'd realize the entire Emerging Leader narrative was misleading:

  • The cats didn't decide on their own to be there.
  • The cats keep returning to where the cat treats are.
  • Without treats, that place has no intrinsic value to the cats.

    If you realize that, you might also see through the Pew Charitable Trusts' "Clean Economy Rising: Solar shines in North Carolina" report, which received extensive media coverage across the state.

A document of dependence

    There is not one page in the Pew report that does not underscore the fact that the ballyhooed "success" of solar energy in North Carolina is heavily dependent upon public policies, state and federal. They include mandated purchases via the state's renewable energy portfolio standards (RPS), the state's 35 percent investment tax credit, federal tax incentives, federal research grants, other financing assistance, and other incentives.

    The beating heart of the solar industry in North Carolina is the artificial life support of green cronyism: government mandates, giveaways, and tax incentives. It isn't market demand, consumer choice, cost competitiveness, creative disruption, efficiency breakthroughs, and so forth.

    To cut to the chase: In this report as in other discussions of solar as a successful industry, there's no mention of lower electricity prices. Consumer electricity rates are That Which Must Not Be Named when discussing nondispatchable energy sources such as solar and wind.

    Electricity is a basic household need, not a luxury purchase. As such, its costs especially affect the poor.

    Here is the very first sentence of the cover page overview: "North Carolina has emerged as a clean energy leader in the Southeast because of its high-caliber academic institutions, robust public and private investments, and policies such as the renewable energy and energy efficiency portfolio standard."

    The report proper opens on page 2 with a discussion of "Clean energy policies" - first things first! - from the RPS to the 35 percent investment tax credit to federal incentives. It includes a table of "Key State Policies."

    Page 3 focuses on those policies as "Sources of power and economic growth." By economic growth it means growth of industries getting fed with the mandates, tax credits, and incentives. It most certainly does not mean economic growth stimulated through industries and consumers enjoying lower energy costs [That Which Must Not Be Named] and therefore being able to invest and spend in other areas.

    It also refers to state revenue growth, using an analysis by RTI International for the North Carolina Sustainable Energy Association that produced the fantastic figure that North Carolina receives nearly 20 times over in revenue what it hands out in incentives. A peer review of this analysis by economists at the Beacon Hill Institute at Suffolk University completely discredited it, finding it to be "spurious" and "absurd."

    Page 3 also explores solar energy's "success" in terms of its catlike ability to subsist at state food bowls: "Solar energy's relative success may stem from its strong resource potential in North Carolina, the rapid decline in photovoltaic panel prices nationwide, and state policies such as the renewable portfolio standard and tax incentives that encourage both utility-scale and distributed projects."

    The very next sentence underscores this definition of success as getting government rather than market support: "New solar capacity additions and investment will slow in 2016 due to the looming expiration of the federal investment tax credit."

    Page 4 illustrates how much this investment will slow: from over $1.6 billion expected this year to under $800 million in 2016, then to just over $400 million in 2017.

    In other words, when the federal tax credit expires, the report predicts a 75 percent reduction in investment in solar energy in the next two years. That ought to be the news coming out of this report. Wonder what would happen if the state RPS mandate and tax incentives also expired?

The 'New Cash Crop'?

    Successive pages continue to demonstrate that report authors are impressed with the solar and other renewable-energy cats chowing down on state and federal treats. Look, these projects are getting federal grant money! Solar farms didn't use to exist here before the RPS! This project got a Department of Energy grant! That project got one from the National Science Foundation!

    The report goes so far as to declare solar power "The New Cash Crop." Why? Because governments are buying and then forcing energy consumers to buy. Come to the food dish; you'll get fed.

    The poor family deciding to don extra sweatshirts and blankets in the winter thanks to successive, large electricity rate hikes may be less impressed that all these public policies are making an obviously unsustainable industry a "cash crop." But reports such as this aren't for their benefit.

    They are instead aimed to prod lawmakers to keep the policies and cronyism going. That is, to keep politicians filling their treat dishes.

    Afterthought: Let me amend that statement about reports such as this not being for the benefit of poor ratepayers. It occurs to me that ratepayers could burn them for a little temporary warmth.
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