Rooftop Solar Subsidies Enshrined in the Arizona Constitution?
It seems reasonable that the rooftop solar lobby wants to make its money while the sun’s a-shining. But, while the sun will be around for the next 5 billion years or so, the rooftop solar leasing companies’ business model will need to be reworked soon or face a rapidly dim future. Unless, that is, the rooftop solar industry can shield the subsidies it was built on and halt the natural progression of market economics.
The rooftop solar model is predicated on subsidies that benefit solar installations, but are paid for by others. These subsidies come in various forms like federal tax incentives and hidden subsidies within the byzantine program called net metering. Absent the subsidies baked into rooftop solar leases, the model is a bust – for potential solar customers and for the companies seeking profits on the leases.
Economists will tell you an industry dependent on government sanctioned subsidies is unsustainable. Those businesses and consumers that pay the subsidies to support special interests will eventually tire of paying extra taxes and costs. Entrepreneurs will be enticed into the market and introduce a competitive or substitute product without subsidies.
So, the rooftop solar industry would like to ensure a measure of permanency for its revenue and profit streams by enshrining the subsidies that make oversized profits possible, into the Arizona Constitution. A solar industry supported initiative is being circulated that would add a constitutional amendment to do just that. The initiative organizers must secure the signatures of 226,000 Arizona voters by early July to place the question on the November ballot. They apparently have significant financial backing to help reach that goal.
But, changing the Constitution to favor a relatively small industry contrary to the interests of electricity consumers is pure folly, particularly given the rapid development of different energy technologies that can compete with solar PV on an unsubsidized basis. After all, if the rooftop solar subsidy is embedded in the Constitution, it’s not easily changed or repealed.
Why not shelter electric vehicles in the Constitution; what about fuel cell technology, or nuclear power plants? Just think what a mess Arizona would be today if the much ballyhooed Alternative Fuels Program, which became law in 2000 was in the Constitution rather than in an easily repealed or modified statute? The original Alt Fuels Program, rife with extremely rich tax incentives for purchasing luxury vehicles for conversion to compressed natural gas, was on course to cost the State nearly $1 billion. Fortunately, once the gaffe was realized, the legislature modified the program to mitigate the looming fiscal disaster.
The rooftop solar industry’s effort to cast in stone subsidies that prop-up its withering business model is economic protectionism at its worst.
It’s just wrong.