Wednesday, December 4, 2013

Solar freeloaders? Whatever the market will bear...

Some things that we take as basic truths aren't true at all.

For example, I asked this question once:

...why do the cable and satellite providers have to pay content providers to carry their channels? An equally valid point could be made that it should be the other way around. Namely that content companies, who get to charge rates to advertisers, can charge higher advertising rates if more people have access to their shows. So therefore, doesn't it make sense that the content providers actually pay the cable/satellite providers to get access to those additional markets?

The reason that the fees go one way instead of the other way is because that's what the market will bear. If you make the appropriate argument, you can get away with anything.

Take people who install solar panels on their houses, and actually end up providing energy to the electric company, instead of the other way around.

Those people with solar panels are...well, they're a bunch of freeloaders!

Further details of Alec's strategy were provided by John Eick, the legislative analyst for Alec's energy, environment and agriculture program.

Eick told the Guardian the group would be looking closely in the coming year at how individual homeowners with solar panels are compensated for feeding surplus electricity back into the grid.

"This is an issue we are going to be exploring," Eick said. He said Alec wanted to lower the rate electricity companies pay homeowners for direct power generation – and maybe even charge homeowners for feeding power into the grid.

"As it stands now, those direct generation customers are essentially freeriders on the system. They are not paying for the infrastructure they are using. In effect, all the other non direct generation customers are being penalised," he said.

Eick dismissed the suggestion that individuals who buy and install home-based solar panels had made such investments. "How are they going to get that electricity from their solar panel to somebody else's house?" he said. "They should be paying to distribute the surplus electricity."

In November, Arizona became the first state to charge customers for installing solar panels. The fee, which works out to about $5 a month for the average homeowner, was far lower than that sought by the main electricity company, which was seeking to add up to $100 a month to customers' bills.

Of course, ALEC (the American Legislative Exchange Council) isn't doing this to reap money for utility companies. They're doing this to get Ed Asner mad.

Actually, the issue is that people with solar presumably buy less from the electric company, and since electric utilities aren't true private enterprises, they need to be compensated for this loss in business. If the electric utilities were smart, they'd invest in wind farms and sell the slice-and-dice results as "food for environmentally conscious omnivores."

(Credit to Marilyn Gerber, who shared a reprint of the Guardian article that I quoted above.)
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