Subsidies Done Right — California Solar Initiative’s Success
Theoretically, subsidies shouldn’t last forever – they should stimulate certain behavior and last long enough to do so but not so long as to suck cash away from taxpayers without purpose.
Unfortunately, that’s often not how things work. Fossil fuels, whose use should be discouraged at this point, continue to get trillions of dollars in subsidies each year. Many other subsidies in various sectors live on like zombies no longer serving their initial, legitimate purpose.
Now, since fossil fuels continue to get subsidies, and their externalities (an extremely costly form of indirect subsidy) are not addressed, I don’t think renewable energy sources or EVs should have their subsidies removed. If fossil fuels someday got priced properly and subsidies got removed, then it would make sense to cut renewable and EV incentives.
Nonetheless, assuming an ideal world in other respects, the California Solar Initiative shows how to do subsidies correctly, and the positive results and evolution of solar in the Golden State. Here are the facts, via Solar Love:
- 1,750 megawatts — The CSI hit its 2016 target one year ahead of time, achieving 1,753.6 MW by the end of December 31, 2015 (and another 139.7 MW reserved).
- $10.87 per watt to $5.14 per watt – That’s how much California solar prices dropped from Q4 2008 to Q4 2014 (of course, global factors were a big part of the story here).
- 5,681 projects, representing 17.2 MW of solar power capacity, have been installed under the Single Family Affordable Solar Homes (SASH) program. (317 more SASH projects are in progress, with a total capacity of more than 1 MW.)
- 372 projects, representing 24.67 MW of installed capacity, have been installed under the Multi-family Affordable Solar Housing (MASH) program. (214 more MASH projects are in progress or under review, with a total capacity of 38.6 MW.)
- Despite a loss of rebates for much of 2015, solar installations continued to grow, and that seems to be the case in 2016 again as well.
Now, as I said, since fossil fuels continue to get massive subsidies, I think solar should continue to get direct financial support in California and elsewhere. Nonetheless, there’s some satisfaction seeing a program hit its target, see it get phased out, and see the market continue going strong. Certainly not the pattern we saw with fossil fuels….
Image Credit: Solar power installation on California home via spirit of america / Shutterstock.com
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