Solar Power Incentives
For many years, governments around the world have been offering incentives to homes and businesses which install and operate photovoltaics, or as they’re more commonly called, solar panels. While at first the cost of solar power may be more expensive for the owner or operator, these incentives are meant to make the option competitive with what is currently available on the normal electric grid, whether it be powered through coal, natural gas or another.
In general, the most common forms of monetary incentives on a federal level include investment subsidies (or paying the consumer back for part of the cost of the installation of the solar panels), net metering (in other words, the consumer can buy the solar energy from the owner of the solar panels at a rate that’s guaranteed to stay the same over multiple years) and solar renewable energy certificates. With an SREC, the owner of the system receives one credit each time 1,000 kilowatt-hours of electric are produced. The credits can then be sold.
Government Participation in the Solar Power Movement
Regardless of all this, some say the government, no matter where you’re located, can still do more for the movement. Governments should be running their own buildings with solar power. Not only would this be a substantial change for the environment, but it would also help government buildings save long-term cash (thereby resulting in taxpayer savings) and also increase the solar market exponentially, and popularity would drive down the price.
Certain reasons on the government’s end for solar power incentives have been named, such as the promotion of energy independence, the creation of new jobs and the reduction of carbon dioxide emissions. Out of these, however, the reduction of carbon dioxide emissions, resulting in climate change, is the reason which receives the most attention. Many politicians have spoken out regarding a need for climate change via renewable energy sources, but whether or not it’s a means to public favor or a legitimate effort remains to be seen.
In 2008, Al Gore challenged the United States to reach a goal of 100 percent renewable and clean electricity within 10 years. Now, only a little more than a year from that deadline, not much has changed. Gore’s well-laid plan included upgrading an “antiquated, fragile and vulnerable” current grid system that costs more than $120 billion each year from power outages and defects; helping auto makers switch to plug-in electric cars; guaranteeing all those working in the fossil fuels industry “good jobs in the fresh air and sunshine;” and forcing taxes onto carbon-based energy usage. It was a lofty goal, to be sure, but one that the international environmentalist and politician assured listeners was absolutely necessary in order to prevent irreversible climate change.
Can a Consumer Really Win?
Is it really any wonder, however, that renewable energy sources such as solar energy haven’t caught on to a more popular degree? The current consumer model is drastically flawed, and even with government incentives, many providers still find ways to scam consumers or profiteer in any way they can.
In some instances the fault lies with a non-utility, third-party solar panel provider. They provide long leases of a solar panel system at little upfront cost, just a monthly fee, supported by estimated higher future costs on traditional power. While a consumer doesn’t own the actual solar panel system, they rather buy the electricity generated from it, allowing for a low installation cost. However, generally the estimated higher future costs of traditional power are incredibly inflated, and the homeowner continues to pay a higher monthly payment for the solar energy that doesn’t save them anything. When many go to cancel the lease, they see that the leasing of the solar panel system is typically set up through a lien on the actual property itself.
In other, less drastic instances, the provider still retains ownership of the actual system and the consumer buys the energy from the provider instead of paying for the equipment; however, instead of placing a lien on the consumer’s home, the provider also retains all ownership of the renewable energy credits (much the same as the SREC discussed above). The provider then, of course, sells those credits to the power companies who need to satisfy clean energy requirements. The problem with this is more ethical than financial (though there is a financial cost too). By allowing the provider to sell what should be your renewable energy credits, you
(a) lose out on the money earned from the sale and
(b) are allowing the utility company to meet a credit goal enforced by the government, without the utility company actually doing anything to earn them. If no one sold them these credits, then they’d be forced to actually create more solar power itself.
Utility Companies Out For Blood
It’s not the only way the utility companies are coming up against solar power, either. Beyond buying credits to avoid meeting solar power industry goals, some utility companies are asking their local politicians to either reduce government incentives or impose fees on those who install solar panels.
Some are taking a less conflict-oriented approach. In the U.S. alone, there are more than 2.7 million miles of power lines and 5,800 traditional power plants, and utility companies are finding the grid even more expensive to maintain. In light of this, a handful of providers are simply asking for legislation to be passed to require those with solar panels to continue to pay their fair share of maintaining the electric grid.
So, with the current system, is there really any way for the modern homeowner or consumer to win with solar power alone? Yes you can, but you need to be aware of all the facts and fine detail print.