Solar tax credits are not “conservative” or “free market”

Will Louisiana decide to rein in massive subsidies for solar?

AAATommySThe solar industry has poured a startling amount of effort and funding—much of it backed by California-based, billionaire hedge fund manager Tom Steyer, who is heavily invested in solar—into attempting to gain the legislative favor needed for it to survive.
Nationwide, the growth of the renewable power industry is dependent on a combination of big government mandates, tax credits, and subsidies—making it the perfect target of wrath from limited-government, free-market, and/or fiscally conservative individuals and policymakers.
Some proposed legislation would prop up the industry (Florida) and force it to stand on its own (Louisiana).
In Louisiana, about 80% of the cost of solar installation is paid for through a combination of federal and state tax credits.
In discussing the state’s dramatic $1.6 billion budget shortfall, The Advocate’s Mark Ballard, on April 6 aptly pointed out that the solar industry promises a “full-court press to protect” Louisiana’s generous tax credits that it says are “vital to its survival.” Ballard cites State Revenue Secretary Tim Barfield, who called the solar tax credit’s cost to the state’s taxpayers: “one of the fastest growing. The solar credit cost $63.5 million in 2014, up from $9 million in 2013.” Plans to ratchet back—not remove—the tax credit, Ballard reports, could save the state $57 million.
Facing the loss of the essential-to-survival tax credit, legislators have been besieged by solar supporters. State Senator adleyRobert Adley says many, claiming to be “a businessman,” have sat in his office to plead the case. He snaps back: “You are not a businessman. A real businessman has skin in the game; has his own money at risk. With 80% of your costs coming from the taxpayers, you don’t depend on the market, you depend on the government. You are feeding at the trough.”
Representative J. Lance Harris agrees: “This subsidy absolutely makes no sense, there’s no energy crisis!  We’ve got plenty of oil, plenty of natural gas, and plenty of electricity. What if the taxpayer subsidized 80% of the cost of a new Porsche for anyone who wanted one?  There’s no difference; it’s misguided and ridiculous.”
As part of its “full-court press,” the solar industry is bringing the Tea Party’s Judas Iscariot equivalent to town. Debbie Dooley, who was part of the original Tea Party movement back in 2009, has since capitalized on the affiliation by claiming—as she did in her April 7 Facebook post crowing about “speaking directly after Al Gore” at an event in New York—that she is “advancing energy choice in a conservative way through free market competition.”
A power source that depends on big government handouts of taxpayer dollars for “survival” doesn’t qualify as “conservative” or “free market.”
During a recent trip to Louisiana, I was discussing the state’s generous solar subsidies on Jeff Crouere’s Ringside Politics radio show. He asked me how the solar subsidies were working. I explained that the answer depended on which side of the equation you stood. For the solar industry and homeowners, who benefitted from the subsidies, it was working well. But for the taxpayers and ratepayers: not so good. We chatted for a few minutes about the situation and, then, had a caller who couldn’t have been more perfect if I’d scripted him.
The caller planned to dispute my argument and, instead, ended up reinforcing it.
He told about his rooftop solar system—with which he was very happy. Why wouldn’t he be happy? He got a $40,000 system for $7,000. He explained that, now, after 5 years of payments, his electricity was virtually “free.”
BobbyJI was pleased that the caller addressed the system’s $40,000 cost. If one only listens to the ads, you’d think a solar system is cheap. He went on to say that he “got a generous check from Bobby Jindal” and he “took advantage of the federal incentives”—which resulted in his $7,000 cost. He bragged that he amortized the cost over 5 years. He argued with me over my assertion that a few rooftop solar customers penalized the entire ratebase.
At the end of the call, Crouere asked for my response. I pointed out how the caller made my point. Courtesy of Louisiana and federal taxpayers, he got a $40,000 system for $7,000. Because the utility is required to buy the surplus electricity his system generates (when it does) during the sunny days at full retail, known as net metering, and he buys it back at night, his bill is essentially zero. But any business owner knows that you can’t buy your product at retail and sell it at retail and stay in business for long. Because of people like the caller, who as Senator Adley stated, are “feeding at the trough,” costs for all ratepayers must increase to cover all the expenses of generating and delivering electricity that he is using but not paying for.
Yes, the caller benefitted from the system, but taxpayers and ratepayers are the victims of his windfall. Like Dooley, he debdoobelieved it was a free-market choice. Yet, government subsidies picking solar as a winner make it possible—even attractive—for him.
The Advocate quotes Dooley as saying: “conservatives want to champion free market choice, and not let the government pick the winners and losers”—though that is exactly what the state’s solar subsidies, for which she shills, do. No other industry receives $63.5 million of Louisiana taxpayer’s money in one year. Yes, the industry claims it has created 1,200 jobs, which costs taxpayers almost $53,000 per job.
In defending the subsidies, solar supporters like Dooley claim that the fossil fuel industry gets them, too. However, in 2013, the state’s oil-and-gas industry paid nearly $1.5 billion in state taxes and supports 64,669 jobs in the extraction, pipeline, and refining industries—not including indirect taxes and jobs. The petroleum industry gives; solar takes away.
 
As the Louisiana legislature looks at ways to fix the budget deficit, it is clear where cuts, rather than encouragement, should take place. 
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About the Author: Marita Noon

Marita Noon

CFACT policy analyst Marita Noon is the author of Energy Freedom.,

  • Dorian

    This is a perfect example of how corrupt the system is.

    In similar vain, a few hundred years ago, a group of white men in Washington DC got the idea to give at a cheap rate (that is, subsidize through theft) land to anyone who could make the journey west of the Mississippi; the Go West period. Did these white men in DC ever consider that it wasn’t their land in the first place, that it already belonged to some people already, no of course not. So theft and genocide was made legal.

    Take a look a the EU’s Common Agricultural Policy, CAP, the purpose of CAP was to protect small farmers and their rural way of life, but that is just a lie. 80% of CAP aid goes to just 25% percent of farms, and that 80% constitutes 40% of the ENTIRE EU budget. That 40% of the EU Budget consists of the rich landed gentry and their mega-farms and the vast agricultural conglomerates, including, Queen Elizabeth II whom receives half-a-million euro a year, food industry super giants Campina and Nestle, known to receive hundreds of millions euros. The small European farmers get little and as for other poor farmers in developing nations, they are banned from entering the European market. When you are in power you can make stealing from people legal. So theft is made legal.

    And here we are again. The story is written again and again. We all know the score. Governments are corrupt, they help only the rich, that help them. Social Entropy is always the winner, and the poor bastards that pay for all this, that is, the taxpayers, just keep on getting screwed.

    It matters not, solar energy or green energy, climate change, agricultural subsidizes, NGOs (do really think they are non profit!), and on and on and on, the result is the same, the crooks, the mafia, the dishonest, the rich, the powerful always win, cause the system is rigged. When crooks are the law makers, how the hell do you expect the average Joe (or for that matter, American Native, and non European farmer say from Africa – that’s who the EU CAP was really designed to target against) to have a chance?

    Those people may call it subsidizes, but lets call it what it really is, legal theft by discriminating to the wealth class, and out-and-out racism through stealthy subversion and pretence.

    And the result, when you beat people with corrupt laws, its no wonder they flee their countries where the US and EU support tyrants, and thus risk life and limb to come to the US and Europe.

    And so as far as the EU is concerned, the hoards are coming, Europe, and you have only yourself to blame.

    Ah Social Entropy…what a path to self destruction! What’s the point of all those history books on the Fall Of The Roman Empire, when nobody learnt anything from them, or more likely, didn’t care. That’s why history repeats itself, again and again, because the corrupt don’t care, and its the corrupt that run the show.

    Its not that humans do not ever learn, its just that there are too many corrupt individuals in humanity which always seek to personal gain at the expense of the honest hard working individual. That’s what happens when you don’t make people accountable for their actions, and that’s when Social Entropy takes over.

    Social Entropy, wins again!

    • Well Done

      Blame the US and EU for all your problems and look a complete aszwhole. Go ahead.

  • Dano2

    Excellent point. All the $Bns in subsidies the fossil industry vacuums up distort the market, make monopolies, and are not freedom-producing.

    Best,

    d

  • Ms.
    Noon is correct. And I point out the
    following federal subsidies which are contrary to the many comments appended to
    this article. The average 2013 US price
    for wholesale power is $45.83 per MWh; average based on seasonal and time of
    use demand fluctuations annualized.
    Hidden subsidies are coal: $0.57, oil & gas: $0.59, nuclear: $1.41,
    hydroelectric: $1.46, non-wood biomass: $5.56, geothermal: $15.53, wind:
    $35.37, and SOLAR at a whopping: $486.28.
    That, of course, is per MWh. MWh
    means million what hours. So the federal
    subsidies supporting solar are over 10 times the cost of power on the wholesale
    market open exchange! We are in the
    process of developing a consumer video game to model the hidden costs of energy
    and here is a presentation which is extremely well researched with extensive
    references and bibliography. And no Big
    Green OR Big Oil companies will be allowed to fund us. We are democratizing this through crowd
    funding. But having said that, Ms. Noon
    is absolutely correct is flagging the subsidizations. Some people might even be so bold as to use
    the word corruption. Please see our game
    slide set at: http://powerrfuture.com/energy-game-proposal/#A Please feel free to contact me directly at [email protected]. Respectfully, Tom Tamarkin

  • Facing the loss of the essential-to-survival tax credit, legislators have been besieged by solar supporters. A real businessman has skin in the game; has his own money at risk. With eighty percent of your costs coming from the taxpayers, you don’t depend on the market, you depend on the government. You are feeding at the trough.”