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Published on January 28th, 2014 | by The Alliance for Solar Choice (TASC)

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Monopoly Utilities Neglect To Mention Billions In Fossil Fuel Subsidies

January 28th, 2014 by  


Last weekend, the New York Times took a look at changing GOP perspectives on solar – particularly rooftop solar – as more conservatives embrace renewables. The article highlights rooftop solar-supporting conservatives like Barry Goldwater Jr. and Tom Morrissey from Arizona, and Debbie Dooley from Georgia.  The piece describes a shift in GOP attitudes toward rooftop solar, which represents a competitive threat to monopoly utilities:

“One would not expect to see Barry Goldwater Jr., the very picture of modern conservatism and son of the 1964 Republican nominee for president, arguing passionately on behalf of solar energy customers. But there he was last fall, very publicly opposing a push by Arizona’s biggest utility to charge as much as $100 a month to people who put solar panels on their roofs.”

Debbie Dooley of the Green Tea Party Movement emphasizes a point that should be integral to all energy discussions:  “The [monopoly utilities] neglect to mention billions of dollars that the fossil-fuel industries have received.”

Yes – conveniently for utilities, they never talk about the tens of billions of dollars in permanent subsidies they’ve received over the past century.  These fossil fuel subsidies are entrenched in the tax code.  For example, since the US began subsidizing energy, the average annual subsidy has been $4.86 billion for oil and gas and just $370 million for all renewable technologies (Source: “What Would Jefferson Do”).

One good example of these subsidies (there are many): Percentage depletion allows fossil fuel companies to take a substantial tax deduction (15% of gross revenue for oil and gas; 10% for coal) for using up reserves of natural resources. This costs the American taxpayer about $1 billion per year.

This graphic below from the Environmental Law Institute summarizes the gap between fossil subsidies and solar subsidies well.

If utilities want to look at energy subsidies, let’s start with the oldest ones first.  There are plenty of decades- or centuries-old fossil and nuclear subsidies that should be reconsidered.

 

 
 

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About the Author

advocates for maintaining successful distributed solar energy policies, such as retail net metering, throughout the United States. Retail net metering (NEM) provides fair credit to residents, businesses, churches, schools, and other public agencies when their solar systems export excess energy to the grid. The Alliance for Solar Choice (TASC) was formed on the belief that anyone should have the option to switch from utility power to distributed solar power, and realize the financial benefits therein. The rooftop solar market has been largely driven by Americans’ desire to assert control over their electric bills, a trend that should be encouraged.



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