Because of the unproven notion that burning fossil fuels causes global warming, saving energy has become the cultural norm with the expectation that reducing the use of coal-fueled electricity and gasoline will help everyone. More and more wind and solar generation is being installed and cars use less and less gas, with some being all-electric. This should be a good thing, but it ends up costing everyone—and disproportionately penalizes the poor.
Installing an unsubsidized residential solar photovoltaic (PV) system is expensive and the payoff can be decades. As a result, they are typically purchased by only those with substantial disposable income. A few years ago, I participated in a “solar fiesta.” I live in rural New Mexico where we often have snow on the ground from late October through early March. Due to cost, I only heat my home to 58 degrees in the winter. I have a large south-facing roof surface. I figured I was a prime candidate for a solar PV system. I visited different vendors. When I asked about the payoff, one vendor looked down his nose and emphasized: “It is not about the payoff.” I could not afford to go solar. I still burn pellets in my stove and bundle up all winter.
Those, who can afford the up-front costs to take advantage of the free energy from the sun, can avoid paying their utility company anything. They may even feel smug that they have beat the system. With net metering, when they generate extra power, the meter may literally spin backward. When the sun isn’t shining, they use the power they’ve banked. The end of the month total can balance out.
However, there are still costs to the electric company. The usage is still monitored. The home, or business, is still tied to the grid. The wires and other system services require maintenance and those costs are factored into the per-kilowatt-hour price and are borne by all the rate payers. But what happens when the wealthy few, who have the luxury of installing a solar system, no longer contribute to the communal cost of service? The overall cost must be spread to a smaller pool of users, which means rate increases for everyone—except those who are getting “free” electricity from the sun.
Case in point, in Hawaii, government mandates have encouraged the installation of solar systems. In 2011, Hawaii Electric Company (HECO) customers installed nearly triple the number of solar PV panels over the previous year, enough to generate a maximum of 30 megawatts of electricity. While this free electricity is saving homeowners and businesses millions of dollars in their utility bills, the personal savings translate into a $7.4 million loss to HECO—revenue that would typically contribute to fixed maintenance costs and system upgrades. As a result, HECO needs a rate increase that will cost the average ratepayer up to an additional $10 a month or $120 a year. The Honolulu Star-Advertiser reports: “HECO customers who don’t have solar panels will see their rates go up because of the increase in customers who do.”
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