Slandering solar is not about protecting taxpayers, but utility’s monopoly status

After decades of operating as a natural monopoly, utilities are finally being disrupted. With declining costs, innovative financing models, and real consumer savings, rooftop solar panels are giving consumers choice and competition, which is something everyone should cheer about. Like the cable and wireline monopolies of old, disruption promises lower prices and better service. But utilities are not going down without a fight. They have launched a fear-mongering campaign to get politicians and unelected rate-setting boards to protect their monopoly status at the expense of consumers. The latest public salvo comes from David Williams of “Solar Secrets,” whose baseless attacks on one solar company represent the desperate attempt of the last U.S. monopoly to cling to the business model of yesterday.

For context, the utilities see the writing on the wall. Since 2013, the rooftop solar industry has grown over 30 percent, prices have dropped 65 percent in five years, and the industry has created over 170,000 U.S. jobs. In fact, a new solar panel goes up in the U.S. every 150 seconds. So despite that solar power is still in its nascence, accounting for less than one percent of total market share, utilities are not waiting to be displaced.

{mosads}In fact, two years ago the Edison Electric Institute (the utility trade group) released a report that outlined the apparent threat that rooftop solar played in lowering utility profits, launching campaigns in states across the country designed to slow or stop solar’s explosive growth dead in its tracks.

For example, earlier this month Salt River Project (SRP) in Arizona raised electric rates only on solar customers by $50 to $80 a month. Beyond SRP, Arizona Public Service (APS), Arizona’s largest utility company drafted a letter used by Arizona’s congressmen to the Federal Trade Commission and Consumer Financial Protection Bureau to slander solar. Meanwhile, the company’s CEO routinely met with regulators to urge the passing of pro-utility rules, according to a whistleblower on the regulatory commission.

And it’s not just Arizona – these anticompetitive measures designed to protect utilities’ monopoly are cropping up across the country. In Wisconsin, utilities are charging discriminatory rates on solar customers and utilities in Indiana and New Mexico are pushing legislation to do the same. The fact is third party leasing of solar, which gives middle class Americans the ability to choose solar energy, is illegal in five states and lacks legal clarity in another 21 states. A competitive market is simply anathema to utilities.

Green Tea Coalition spokeswoman Debbie Dooley recently said, “This is about the freedom to choose and create your own electricity. I think policies that inhibit third-party-owned solar are a blatant attack by these giant monopolies who at every turn have to construct a power plant, and make a profit off the construction of the power plant.”

Williams’ latest attack is simply part of larger effort to preserve a monopoly at the expense of consumers.

For example, claiming SolarCity is struggling by citing annual profits is like claiming legislation is deficit reducing when it merely relies on accounting gimmicks to game the CBO’s 10-year budget window. When a consumer leases a solar panel, the company must report all of their costs related to installing the panel in the first year, but must report the revenues from the lease over the next 20 years. Simply put, for a young company investing in future capacity, annual profits are an inappropriate benchmark. The question is not annual profits but long-term potential. While stock prices are certainly variable, Solar City’s is up nearly five-fold since 2013.

Williams also takes issue with the solar investment tax credit, but fails to point out that all sources of energy benefit from tax credits, including non-expiring tax incentives for both oil and gas that have been in place since 1913. The truth is all of these policies are a part of an all-above-the-board energy strategy to promote energy development in the U.S.

Lastly, Williams’ suggestion that solar leasing is similar to subprime loans is simply laughable. Leases lock in long-term rates and give customers a clear understanding of future costs. It’s why word of mouth has led to the rapid growth of solar in communities throughout the country. Contrary to Williams’ claims, it’s actually utility bills that jump year-to-year, costing consumers more and more, while they book monopoly profits.

Innovative technologies, like solar, can disrupt monopolies, bolster competition and choice, and lower prices for consumers. Utilities and their advocates are keeping consumers in the dark for the sake of their profits. We should not let utilities kill solar.

Goldwater, who served in the House from 1969 to 1983, is the son of U.S. Sen. Barry Goldwater (R-Ariz.) and chairman of Tell Utilities Solar Won’t be Killed (TUSK).


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