Solar Subsidies [RE-wrenches]

[Joel Davidson]

The criticism that "low-income ratepayers struggling to pay their electric bills are subsidizing solar power to reduce energy bills for the affluent" is reactionary rhetoric
from the usual gang which also includes affluent utility managers and politicians. To set the record straight, a very popular public benefit charge is collected from
investor-owned utilities (PG&E, SDG&E and SCE) ratepayers for renewable energy programs. Only 10% ($54 million) is spent on emerging renewables and only part of that goes to
the PV rebate program. Other programs funded by the public benefits charge include subsidizing low income families' electric bills, money for utility company R&D programs
and energy efficiency subsidies for businesses. To refresh your memory, it was the investor-owned utilities deregulation plan that created the public benefit charge because
the IOUs did not want their investors to pay for these programs. The good news is that voters almost unanimously extended the public benefits charge until 2012.

Municipal utilities do not pay into the CEC buydown rebate public benefit fund. Instead, they collect and use the public benefit charge locally. Here are LADWP's FY
2000-2001 expenditures:
$13.6 million for demand side management subsidies to businesses
$1.2 million for green power subsidies
$15.3 million for LADWP R&D programs
$24.8 million for low-income subsidies
$0.4 million for administration
$6.3 million for LADWP PV projects and buydown rebates
$64,072,000 total expenditures.
(I'm guessing approx. $2 million was paid out in rebates, but have been unable to get the exact amount from LADWP or the City Controller.)

Just how much do low-income families subsidize renewables? The public benefits charge on everyone's electric bill in California is $0.0025/kwh (one-quarter of a cent per
kilowatt-hour). The average LADWP residential ratepayer consumes approx. 600 kWh/month and pays less than $1.50/month public benefit charge. Any low-income family that can
not afford the $1.50/month public benefit charge gets their entire electric bill subsidized from the same public benefits fund.

Joel Davidson


Graham Owen wrote:

> Matthew Tritt wrote: “our product will only be
> truly affordable to buyers with higher than average incomes until
> government decides to subsidize it nationally”
>
> Matt, I think you hit the nail on the head here.  Solar needs to become
> subsidized nationally to greatly increase economies of scale.  The
> problem is figuring out how to make these subsidies provide the most
> benefit to the consumer without creating avenues of financial temptation
> and shenanigans by contractors.  I also believe that a percentage of
> solar energy system subsidies should be calculated and paid for the
> energy they actually produce.
>
> I believe there is concern with lawmakers, that it is beginning to
> appear that low-income ratepayers struggling to pay their electric bills
> are subsidizing solar power to reduce energy bills for the affluent, who
> are most able to pay their bills.  As an industry what we really need to
> focus on how to make PV affordable for low-income families.  When this
> is achieved PV will truly be a mainstream product.  Zero interest loans
> and targeted government assistance is necessary.  One possible scenario
> would be to have the IRS allow 30-cents per kWh’s generated annually to
> become deductible from income taxes.  This would keep the solar money
> and monitoring out of the hands of the utilities.  A Zero interest
> government loan for 20 years, with the first payment deferred for one
> year, combined with 30 cents per kWh tax deduction would work
> financially.  A program such as this would require a long-term
> government commitment; say 20 years, to truly change our energy mix.
> Homes with money generating devices on the roof will be easy to sell.
> Now you may ask, could our federal government possibly make such a
> long-term energy subsidy commitment?  It is possible.
>
> I just read a very interesting article in the latest World Energy
> magazine, Volume 5 Number 3, written by Frank Murkowski, U.S. Senate,
> Alaska.  On page 85 he lays out a plan for a 15-year subsidy for a
> natural gas pipeline to the lower 48 from Alaska.  I tried to find the
> article on line to give you a link but a password is needed to read the
> article.  This is an excellent magazine.  I will paste the link below
> but I don’t think you can open the article.
>
> http://www.worldenergysource.com/articles/articledetail.cfm?the_start=1&sortby=last&keyword=Frank&title=&country=&business=&mymax=10&volume=&id=399&auth_id=99&language=E
>
> Graham Owen
> GO Solar Company

[Non-text portions of this message have been removed]

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