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Solar subsidies are a victim of state budget crunches

The views expressed are those of the author and are not necessarily those of Scientific American.


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Solar array on house roof in Glen RidgeEditor’s Note: Scientific American’s George Musser will be chronicling his experiences installing solar panels in Solar at Home (formerly 60-Second Solar). Read his introduction here and see all posts here.

As if the news coming out of Washington about a climate bill weren’t bad enough, state budget crises are also sucking the blood out of many local renewable-energy programs, which are the only concerted action the country is taking on climate right now. In my own state of New Jersey, the rebate for buying a solar array was temporarily suspended in May as the state went scrounging for loose change to plug a general budget gap. It has since been reinstated — partly. Now it provides homeowners only half the money it used to.

The state has also pick-pocketed the funds that ratepayers put into the regional carbon-trading exchange. This money comes from a surcharge on fossil fuel power, which amounts to an average of 41 cents on a $110 monthly electric bill. Conservatives have sought to repeal the surcharge altogether, which is odd, because a true free-marketer would actually want to increase the surcharge until it captured the full external costs of using fossil energy.

Similar dramas have played out in Arizona, Massachusetts, Pennsylvania, Florida, and California as solar incentives have been suspended for varying reasons.

In many cases, though, the subsidies have suffered not from budgetary shenanigans but their own sheer popularity. Evidently the word is getting out that solar is a great deal. It remains so. In New Jersey and elsewhere, the diminished subsidies are partly offset by the higher market value of the tradable credits we receive for the solar power we generate. Also, array prices have fallen by a third over the past couple of years.

So the scaling-back of subsidies, tawdry though it has been, can be seen as a tribute to solar’s success. In fact, solar advocates have always spoken of the government incentives as a way to kick-start to industry — needed only for a limited time. If only we could say the same of subsidies for fossil fuels.

Photo courtesy of George Musser





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  1. 1. frgough 11:17 am 07/30/2010

    Fossil fuels are not subsidized. Fossil fuels are taxed. Allowing a company to keep more of the money they earn is not a subsidy. I know you’ve been propagandized to think that all money appears ex nihilo in government and then is handed out by our beneficent rulers for the betterment of mankind, but it’s time for you to unplug from the matrix and free your mind.

    Link to this
  2. 2. gmusser 12:20 pm 07/30/2010

    Here are some good starting points for discussions of fossil-fuel subsidies:

    http://www.scientificamerican.com/blog/60-second-science/post.cfm?id=how-much-in-subsidies-do-fossil-fue-2009-09-18
    http://www.economist.com/node/14540043
    http://arjournals.annualreviews.org/doi/abs/10.1146/annurev.energy.26.1.361
    http://www.nature.com/nature/journal/v392/n6674/full/392327a0.html

    George Musser

    Link to this
  3. 3. RAS 12:56 pm 07/30/2010

    Hello George: Good article. Have you seen any spreadsheet or report that details the current status of state renewable incentives in the U.S.? Please advise, Richard

    Link to this
  4. 4. SpoonmanWoS 1:38 pm 07/30/2010

    "because a true free-marketer would actually want to increase the surcharge until it captured the full external costs of using fossil energy"

    Well, therein lies the problem. Most people who call themselves "free-marketers" are really just the mindless drones who’ve been convinced by their corporate overlords that they will someday get rich through hard work and will be penalized for it. They fail to grok that it’s the corporate overlords who are the ones getting rich off of the hard work of the drones while attempting to also shift most of the tax burden to them. It’s called "redistribution of wealth" and it involves taking the money from the poor and giving it to the rich.

    @RAS: might’ve helped if you provided a link to this spreadsheet of yours.

    Link to this
  5. 5. gmusser 3:51 pm 07/30/2010

    @RAS: Your best bet is http://www.dsireusa.org/

    Link to this
  6. 6. steezyjesus 12:49 am 08/2/2010

    To some degree, the fact that these subsides are begging to dissipate are not a bad thing. It just means that solar is becoming more popular and practical. It seems like everyday I read about a new breakthrough in solar technology. Just the other day I saw a inspiring video the other day about a solar energy technology that has just been developed that is not only cheap and flexible but 10,000 times more efficient! I’ll post a link to the video if you would like to view it for yourself.

    http://www.ndep.us/Its-a-Small-World

    Link to this
  7. 7. Steven Colyer 8:50 am 09/16/2010

    "Politics" is the number one reason I switched from Business top Science. The bottom of the barrel has been scraped, and the bottom feeders are now eating through the barrel itself. "Greed" has replaced "public service" except for a too small group of exceptions.

    What is happening in New Jersey is understandable in light of the fact our Republican governor was elected to slash the budget. So far, mission accomplished.

    But the "free-market" mantra of Conservatives is an illusion (much like "time" George, heh. "Time is an illusion, lunchtime doubly so." ,,, Douglas Adams).

    Virtually everything the far right "spins" at us is in defense of Global Corporations, and Big Oil/Coal/Natural Gas in particular. What does Big Oil hate? Competition, and nothing "competes" with oil at the moment like Wind, Solar, and Geothermal. If they were only honest about this we could have an intelligent discussion with them, but no, they "spin" a web of truths, half-truths, and lies to the point we can’t be sure of the facts of virtually anything anymore.

    In Energy, doubly so. :-)

    Link to this

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