Who Is to Pay for Solar-Generated Electrical Power?

“It isn’t easy being green,” said Kermit the frog.  It sure isn’t

As we need not tell you, for some time now we have been hammered with the message that we should be “green,” which among other things means that we should reduce our fossil-generated electrical power consumption because that reduces carbon dioxide emissions and will stave off climate change. And one good way to do that is to reduce consumption of electrical power generated by fossil burning power plants by replacing at least some of it with solar power — you install a photovoltaic cell array on your roof and its output replaces some of the fossil-fuel power generated with fossil burning utility companies with sunlight. Not only that, your electrical bill goes down and the government subsidizes the cost of your photovoltaic array. Is that cool, or what?

Unfortunately, the first law of thermodynamics still operates and somebody has to pay for that power. As the number of photovoltaic arrays on home roofs is growing, the electrical power generating utilities have come to realize that the value of that sun-generated power (and the homeowners’ resulting savings) are coming out of the utilities’ income stream. Oops. What now?

The New York Times reports that some of the power generating companies are doing something about that, and are demanding that retail power users who use photovoltaic power pay a fee to the utilities, to make up for the revenue loss. And so in Arizona, “owners of solar panels would have to pay a new fee to power companies.” Diane Cardwell, Compromise Defers a Solar Power Fight, N.Y. Times, Nov. 16, 2013.

“The Arizona Corporation Commission [which regulates public utilities], agreed . . . and set a fixed charge [of] 70 cents per kilowatt of system capacity, to pay for it. That works out to roughly $5 a month for an average system, rather than the $40 to $50 [per] month the utility wanted, though that would have included an upfront cash subsidy.”

So what we appear to have on our hands is the sort of nonsense of yore, when Uncle Sam subsidized tobacco growers, and simultaneously demanded that people stop using tobacco products.

Which brings to our mind a question. Whatever happened to Reddy Kilowatt? Remember him?

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