The Pennsylvania Public Utility Commission (PUC) just ended the solar subsidy called net metering, and the state legislature isn’t likely to overturn the decision.
The state commission found twice that net metering solar subsidies are not in the public interest, as they raise the price of electricity and transfer money from poor people without solar panels to rich people with them. The PUC is made up of both Republican and Democratic appointees and voted unanimously both times.
The only way to stop massive subsidy cuts is if the state legislature blocks the PUC’s plans within two weeks. But the legislature isn’t interested in doing so and will soon leave for a summer break.
“Basically, the moon and the stars have to align in a perfect order for this to be stopped,” Todd Stewart, a partner at a regulatory law firm in Pennsylvania, told the Pittsburgh Post-Gazette. “Otherwise, if the commission intends to promulgate the regulations anyway over the double objection by IRRC, they can still do so.”
Net metering policies force utilities to buy electricity produced by rooftop solar panels at retail rates, which means companies can’t cover the fixed costs of operating the electrical grid. Rooftop solar companies such as SolarCity, have pushed these policies as a way to encourage solar power across the country.
The PUC found that forcing up the price of electricity via net metering hurts the poor and ethnic minorities the most, because poor people tend to spend a higher proportion of their incomes on basic needs like groceries, power bills, gasoline, etc. than wealthier people. As essential goods like electricity become more expensive, the cost of producing goods and services that use electricity increases, effectively raising the price of almost everything.
Policies like net metering hurt the poor 1.4 to four times more than they hurt the rich, according to a study by the National Bureau of Economic Research.
A 2015 study by the Massachusetts Institute of Technology (MIT) concluded rooftop solar subsides are inefficient and costly, and that rooftop solar companies simply cannot compete without government support.
Even proponents of solar power and net metering recognize their reliance on subsidies. Without high net metering payments, rooftop solar “makes no financial sense for a consumer,” Lyndon Rive, CEO of SolarCity, admitted to The New York Times in February.
Solar power receives 326 times more subsidies than conventional energy sources relative to the amount of energy produced, according to Department of Energy data. Green energy sources got $13 billion in subsidies during 2013, compared to $3.4 billion in subsidies for conventional sources and $1.7 billion for nuclear, according to data from the U.S. Energy Information Administration (EIA).
Despite the enormous subsidies, solar power only accounted for only 0.6 percent of electricity generated in the U.S. for 2015, according to the EIA.
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