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Published on March 27th, 2014 | by David Baldwin

8

The Solar Right & The Arizona Test Case

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March 27th, 2014 by
 

Originally published in Let the Sunshine In: A Solar Power Blog.

Barry Goldwater, Jr., the son of the late conservative Republican Presidential candidate – and Arizona native – Barry Goldwater (who was defeated by Democratic President Lyndon Johnson in the 1964 election), has always been very much a man after his father’s heart. A retired seven-term US Congressman, the younger Goldwater compiled a solidly conservative record in the House. Though retired from government since the 1980s, he remains a figure of some stature in Arizona’s Republican Party. In other words, he’s absolutely not the kind of person one would expect to champion a progressive environmental position.

I’ve provided a brief background on this man in order to give some context to what seems to me a surprising, and surprisingly heartening, development in American politics. For Goldwater represents one of the most interesting examples of an emerging trend that I call “The Solar Right.” If more conservatives begin to emulate his example, it will bode very well for the future of solar power in this country… and for the future of the planet.

Here’s the situation in a nutshell. Goldwater’s home state, Arizona, awhile ago approved net metering (NEM) for its citizens. Net metering allows homeowners who install a solar power system to receive credit from the utility for that part of the power their systems generate that they do not use themselves, but that is sent out into the electrical grid to be used by other consumers. This is commonly called “running the meter backwards.” For obvious reasons, net metering has been a major incentive for folks to go solar.

However, like absolutely any great thing that happens in this country, net metering has generated fierce opposition, and Arizona represents a classic case in point. The power utility Arizona Public Service (APS) claims that net metering was inherently unfair to those of its customers who haven’t chosen to go the solar power route, because solar customers are allegedly “shifting the cost” of maintaining the utility’s grid to non-solar households. The APS was so adamant on this issue that it spent a whopping $4.7 million on advertising to try to persuade the Arizona Corporation Commission (ACC) to set a very hefty fee on solar households, ranging from $50 to $100 per month, to punish those awful consumers for their wicked, green-and-budget-conscious ways. However, the public, according to a poll (presumably including many respondents from non-solar households), rejected the proposed fee by 81 percent.

This is, by the way, a classic case of a company looking out for its own interests under the pretext of defending the consumer. Even in situations in which part of the power that non-solar households use actually comes from the excess electricity from other households’ solar systems, they pay the entire cost to the utility, so the utility is getting compensated for energy it does not in fact produce. Therefore, it’s only right and proper for the utility to credit solar households for providing electricity to non-solar households. And for those periods during the billing cycle when solar households, due to insufficient sunlight, cannot power their homes through their solar systems alone, they take energy from the grid and pay for it, just like anybody else. As most people will readily understand, this situation doesn’t in any way represent a “state subsidy,” much less “corporate welfare,” as the Wall Street Journal and others claim.

But this arrangement, known as DG (for distributed generation), scares the pants off utilities, because it proves they no longer retain a monopoly over a given communities’ electric power. These fossil-fuel-driven power companies, with their expensive and aging infrastructures, dread being perceived as dinosaurs… which is exactly what they’re becoming. And the more households that go solar, the closer the utilities get to becoming completely obsolete. So it makes perfect sense for them to demand a large monthly fee from the solar consumer, in order to make choosing solar an unprofitable proposition. And a number of powerful right-wing organizations, like ALEC (The American Legislative Exchange Council), strongly back the utilities’ anti-solar stance.

Here is where Goldwater comes in. Mad as hell over the fee proposal, he decided to take action and co-founded an organization called TUSK (Tell Utilities Solar won’t be Killed – no, the acronym doesn’t work, but the name does suggest the tusk of an elephant and is thus intended to evoke the GOP). This “ostensibly Conservative front group” as the Wall Street Journal sneeringly called it, lobbied hard and otherwise generated considerable conservative support in opposition to the fee. TUSK even produced this highly effective ad, in which Goldwater personally spoke out:

Conservatives want – no, they demand – freedom of choice, whether it’s health care, education or even energy. We can’t let solar energy be driven aside by monopolies who want to limit that freedom of choice: it’s not the American Way; it’s not the Conservative Way.

As five of the commissioners on the Arizona Corporation Commission are Republicans, these efforts surely did not go unnoticed. In the compromise the ACC came up with, the Commission dubiously decided that cost shifting to the non-solar consumer was indeed taking place in Arizona and ruled to impose a fee on new solar households only. However, this fee was a mere $0.70 per kilowatt, which, for a 10 KW system, would come to just $7.00 per month: much, much less than what the APS had asked for. For the solar industry, it was both a defeat and a victory – a defeat because the Commission’s ruling set a dangerous legal precedent for the establishment of such fees at all; a victory because the APS did not get the kind of cripplingly high fee that would have destroyed the solar industry in Arizona. After all, in many parts of the country (though probably not in Arizona), an average day’s lunch costs more than $7.00.

Many of Goldwater’s conservative colleagues must have been taken aback when he broke with his Party’s mainstream in the most emphatic way possible on this issue. But when you think about it, his position represents one powerful tradition among the many, sometimes conflicting, strands within the Republican camp. ALEC, in its solidly pro-corporate stance, represents the authoritarian strain within the GOP. Goldwater, in his emphasis on personal “freedom” and “choice,” represents his Party’s Libertarian tendency. Ironically, in boldly asserting the consumer’s freedom of energy choice, he condemned “monopolies” as vehemently as any left-winger. But I don’t believe he was being at all contrarian or dismissive of “conservative values” – on the contrary. And it’s quite possible that his message may have struck a chord with at least some influential conservatives, so ALEC’s campaign to kill solar may well be undone… by the Republican Party itself.

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About the Author

David Baldwin is a New York-based writer who has experience in both the corporate and nonprofit world, and who admits to a perfectly normal obsession with climate change and with solar energy's potential to help alleviate it. He blogs about solar at Let The Sunshine In.



  • JamesWimberley

    The other poster child for this interesting movement, and possible trend, is Georgia.
    Polls consistently depict Republican voters as much more favourable to renewable energies than are typical Republican politicians. It used to be cynical to say that “money talks” – now it’s settled law.

  • A Real Libertarian

    “However, this fee was a mere $.70 per kilowatt-hour per month, which, for a 10 KW system, would come to just $7.00 per month”

    That should be $0.70 per kilowatt per month.

    • Peter Gray

      Neither one makes sense. “$.70 per kilowatt-hour per month,” translates to $0.00097 per kilowatt. But a kilowatt isn’t a unit of energy, it’s power, and unless they’re taxing rated installed capacity, it’s meaningless. Your interpretation makes a bit more sense, but I’ve never heard of charges based on capacity rather than output (kwh).

      It would be nice, as so often, if the reporter would do a little more homework and give some context. Normally, utilities pay a wholesale price for rooftop solar (in kwh!), and sell it on the grid at retail (again, always, in kwh). That makes sense, and it’s fair for them to pay wholesale for power from any source. The difference between retail and wholesale should mostly go to paying for the grid infrastructure, which home solar electricity sellers use like everyone else.

      This AZ thing has always sounded crazy and outrageous, but it would be nice to know whether they really are charging based on rated capacity, and whether it’s $7/month for each kw of installed capacity, as suggested. Are they doing the same thing for each backup diesel generator at every hospital, and every standby gas turbine? Yeah, right, just try it.

      • Matt

        Well since DG generation is used locally there is much less transmission involved. It also has other benefits (see studies link on this site). So should receive higher wholesale price. But yes some adjustment is needed. My bill shows a x/kWh for generation and a y/kWh for distribution (plus several fixed fees). Note that x is not the wholesale that Duke paid. So a fair amount would be (x+(A)y)/kWh, now A would be somewhere from 0 (you hate that PV is on grid and see no value to it ALEC would claim it should be negative), or say 0.75 (you understand that DG is only using a little of the grid), to 2-5 (you think all the benefits documented else where should be paid for).

        • Peter Gray

          You may be partly right that DG power is mostly used locally, but once electrons are on the grid, it’s not so easy to say how far away they go.

          What other benefits are you referring to? I’m all in favor of solar, but as an economist I can’t think of a good reason to subsidize any form of energy unless it produces a positive externality. Partly displacing a negative externality is not quite the same thing. Subsidizing renewables is a second-best, inefficient workaround for avoiding what we really should do, which is tax the fuels that produce negative externalities.

          The difference is not just academic. Any subsidy on any form of energy will give an incentive to consume more energy. I don’t think that’s what we want.

          • Jim Seko

            I ain’t no economist but I agree with you about external costs. The problem is political. It’s politically much easier to give tax breaks than it is to impose new taxes/higher taxes.

      • JamesWimberley

        Googling readily confirms that the fee is €0.70 per rated kilowatt of the solar installation per month.

        • Peter Gray

          I don’t think they use Euros in Arizona :-). If it’s $0.7 per installed kw, that’s a token fee of maybe 10% of the wholesale price of the electricity that a 1-kw array could produce. It’s still galling that they would target solar in this way. Let’s hope the reaction is effective.

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