Free Market or Free Lunch?
In a recent opinion piece published in Arizona Capitol Times, Barry Goldwater Jr. conflates “free market” and “free lunch” in his support of subsidies for rooftop solar installers.
According to Mr. Goldwater, the ACC should reject outright new rates proposed by Tucson Electric Power Company for new rooftop solar installations. He aims his comments directly at ACC Chairman Tom Forese baiting him with redemption as a true free market champion if he would only reject past votes, that in Mr. Goldwater’s view, “limit the growth of rooftop solar in Arizona by creating obstacles for homeowner energy independence, stifling open market competition, and restricting economic growth” and vote against TEP’s proposed rates.
While I’m surprised at his attack on Mr. Forese, who has yet to vote on the TEP rates, I’m not at all surprised at the solar industry’s “cry wolf” campaign that any change in rates for new solar customers will kill solar in Arizona. Their chants are heard every time the ACC examines the issue of subsidies and new rates for access to the power grid by solar installations.
Through its “Value of Solar” decision, the ACC affirmed that customers with solar installations do not pay their fair share of fixed grid costs, even though they use and depend on the grid for backup and supplemental power and for conveying excess solar power produced by their panels back to the grid. In its decision, the ACC very clearly stated its desire to reduce subsidies to solar installations by eliminating net metering for compensating rooftop solar exports and gradually transitioning to new rate designs that produce fair rates for all customers.
That’s exactly what TEP proposes.
The new rates won’t kill solar for new installations. And, they won’t affect existing customers, since they are grandfathered under the existing net metering system. The new rates do lower some subsidies flowing from non-solar to solar customers, but new customers can still realize generous bill savings averaging $90 per month by going solar in TEP’s service territory.
Here’s a final question for Mr. Goldwater:
If TEP can purchase solar power on the free wholesale market at 3 cents per kWh, should new rooftop installations be required to sell their excess power back at this price rather than the 9.73 cents proposed by TEP, as required under the ACC’s value of solar decision?
After all, this is how a “free market” should work. There are no free lunches.