Editor'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.
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