Energy

Solar Company Now Opposes Rooftop Solar Subsidies

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Andrew Follett Energy and Science Reporter

The solar company Sunnova says subsidies and tax credits are “hobbling the industry” and should be allowed to expire at the end of 2016.

“That subsidy is distorting the market, it is preventing capital from coming in … [i]t’s because of a belief in entrepreneurship, it’s a belief in capitalism … and that’s what leads us to say we don’t believe in subsidies.” Sunnova CEO John Berger told Politico Monday.

The solar industry has repeatedly pressured Congress to extend its subsidies and tax credits, but Sunnova is the first major rooftop solar company to oppose the extension of solar subsidies.

Rooftop solar is heavily subsidized by a 30 percent federal tax credit for home solar panels. Previously, rooftop solar companies installed $10,000 systems at no upfront cost to the consumer, simply to collect the profitable state and federal subsidies. Solar power receives 326 times more subsidies than conventional energy sources, relative to the amount of energy produced according to Department of Energy data.

Presently, utility companies are forced by law to purchase rooftop solar power at two to three times the rate it would cost to buy electricity from an industrial solar farm. A study by the Massachusetts Institute of Technology concluded that rooftop solar subsides are inefficient and costly. Industrial scale solar power is more economically efficient than rooftop solar, according to a study by Lawrence Berkeley National Laboratory.

Solar and wind power have been heavily subsidized since at least the 1970s. Federal subsidies for solar are about $5 billion annually, with more than half of that amount going to rooftop solar.

Despite these huge subsidies, in 2014 solar power accounted for only 0.4 percent of electricity generated in the United States, according to the Energy Information Administration.

A spokesperson for  Sunnova’s competitor, SolarCity, declined the opportunity to comment. SolarCity is heavily dependent on taxpayer financing to provide solar leases.

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