Increasingly, it seems, the opposition to solar power in New Jersey is based more on ideology than on facts like relative costs and benefits.
On one side (what passes for the left), we hear the claim that solar costs too much and is a burden on ratepayers.
During a recent Board of Public Utilities (BPU) meeting, a ratepayer advocate attorney was heard to complain that poor consumers in Camden are being forced subsidize solar panels on the roofs of wealthy suburbanites.
How fair is that? A fair question.
Thanks to those “subsidies,” New Jersey has leapt to the forefront of “solarizing” states in just a few years, with some 10,000 solar deployments generating 400 megawatts of electricity annually.
The cost to residential ratepayers: less than the price of a newspaper per month. So the “it’s too expensive” populist plea simply doesn’t work.
Besides, every ratepayer — whether a resident of struggling Camden or prosperous Rumson — already pays his/her pro rata share of the total cost of building a vast and complex electric power supply system that includes thousands of miles of power lines and dozens of power plants.
True, those suburbanites fortunate enough to have solar panels on their roofs are doubly benefited: saving on their own power costs and selling back the excess to the utility.
At the same time, everyone benefits from these “customer generators,” in the same way we all partake of every power generation source in the common pool of electric power.
But unlike traditional sources of energy, the more solar there is, the less air pollution. What’s more, solar production is at its peak when power demands are highest — those sweltering July afternoons, for instance. The result: We’re less reliant on costly peaking power to keep the lights on the AC humming.
So much, then, for the populist complaints from the left. More frequently heard is the argument advanced by the right that solar subsidies are a form of centralized planning, an economic system that was consigned to “the dustbin of history” — to recycle Ronald Reagan’s famous phrase — with the collapse of the Soviet Union.
The rallying cry of these critics: “Let the free market decide.”
Why shouldn’t we do exactly that?
Short answer: There is no free market for energy. For decades a vast array of tax preferences for “extractive industries” (oil, coal, natural gas) have supported the fossil fuel market. For nuclear power, the 1957 Price Anderson Act caps industry liability in the event of a catastrophic accident at $12 billion, a small fraction of the costs of the Fukushima disaster.
More fundamentally, there are some things a free market simply doesn’t allow us to choose to buy or not buy. For these “societal goods” there is no market at all. We learned about these “externalities” in Econ 101 — a course that the Republican presidential candidates seem to have forgotten or slept through (or, in Governor Perry’s case, flunked).
Free markets do not put a dollar sign on cleaner air, or fewer mountains removed for strip mined coal or increased national security from lessened dependence on Middle Eastern oil. Free markets don’t “monetize” these externalities; only regulation and targeted subsidies can correct for these example of “market failure.”
So the next time you hear someone complain about “subsidizing” solar power, hand him or her a copy of this column and give him/her my email address. But please, not my home phone number!