Over at Vox on Monday, Brad Plumer wrote a really interesting and oddly exciting article, Solar Power Is Growing so Fast That Older Energy Companies Are Trying to Stop it. It is about how the electric utilities are very concerned about people putting solar panels on their houses, even though less than a half percent of electricity is coming from solar right now. This isn’t just, or even primarily, about the rapidly falling prices of solar technology. Let me explain.
Forty-three states have “net metering” laws that require excess energy collected by homeowners to be bough by the electric utility. This causes a feedback loop. The electric utility still has very high set costs of bringing electricity to everyone’s home. Thus, as less people buy electricity from them, they will be forced to raise the per unit price of electricity. As the price of electricity goes up, so will the pressure for people to install solar panels. According to Plumer, “If rooftop solar were to grab 10 percent of the market over the next decade, utility earnings could decline as much as 41 percent.”
In one way this is great: renewable energy is just around the corner! But we still need the electrical grid. We don’t want to end up with a system where we aren’t guaranteed electricity — you know, like the days when that great free market innovator ENRON was providing (or rather very often not providing) electricity. Even if this weren’t the case, and we could all just switch to solar and say goodbye to (in California) natural gas based electricity, there would be big fights as the utilities tried to keep their lucrative monopolies.
But given that there is a very real need to maintain the electricity grid, this is all turning into a real mess. Plumer mentions how this issue is splitting the conservative movement, where some are actually saying that solar is giving people more choices — which is true. Of course, I don’t especially think this attitude is going to last. Yes, there are Tea Party groups who are very pro-solar. But I’m sure that the ones that stay that way will find their Koch brothers’ oil money dry up and even if the groups don’t disappear, they will have little impact on the debate.
There are, however, many things that can be done to save the electricity utilities. One that is not being talked about is the most obvious: nationalization. But that’s always the way. That is the conservative way and therefore the American Way™. We can’t just solve problems in the obvious way. Like with healthcare, we couldn’t just have a single payer system, with all of its advantages. We had to work out a hugely complicated “free market” system that would appeal to the conservatives, even though none of them voted for it and now they all whine, “Why did Obamacare have to be so complex?!”
As electricity generation becomes more and more individualized and egalitarian, it just makes sense to make the distribution of it nationalized. I wish we could do the same thing with the internet. (Note: nationalize flow not content.) Instead, we are generally stuck with a cable company that totally sucks and a phone company that totally sucks. At least a utility is better than that. But as profits get squeezed, the utilities might start acting very badly — enabled by a corrupt political process, of course.
But it is good news that solar power is going down in price. Let’s just hope that the entire federal government doesn’t become a wholly owned subsidiary of Koch Industries. Then solar panels might be made illegal. And don’t pretend that that couldn’t happen.