Audubon has clean solar electricity that’s going to waste. Does anyone want it?
The Debs Park Audubon Center in East Los Angeles is one of those rare commercial buildings that operates off the grid, powered entirely by solar electricity. Our rooftop solar panels are designed to generate enough electricity even in times of low sunlight, which means that at other times they generate excess amounts. We would like to hook up to the grid and sell that power for other customers to use. Unfortunately, there are no local laws to encourage utilities to pay us for it.
California has some of the nation’s most progressive laws promoting clean power. Yet utilities give us only a credit for our clean electricity. That could offset the cost of other electricity we buy from them, but since we don’t buy any, the credit is worthless. Plus, the credit’s value primarily reflects the cost of cheap electricity, not the actual cost of generating clean solar power. So even if we could use their credits, it wouldn’t repay our investment. Thousands of other green entrepreneurs face similar obstacles. They want to be part of the solution to global warming by installing solar panels on their roofs and in their backyards, but local utility regulations are unfriendly and make doing so unaffordable.
Investors in large renewable-energy facilities aren’t much better off. They qualify for what’s called an investment or a production tax credit, a federal subsidy that offsets some of renewable power’s additional cost. But the credit is unreliable because Congress must renew it regularly, and that’s the point when opponents hold it hostage for whatever they want in return. Plus, the credit is not large enough to make most solar electricity profitable.
Even with increased efficiency, demand for electricity will likely grow. Coal-fired power plants are now the largest source of greenhouse-gas emissions. More than 100 new ones are in the process of being permitted in the United States. If they are built, they will spew emissions for more than half a century, making it nearly impossible to prevent global warming’s worst consequences. Our challenge is giving the marketplace the incentives it needs to produce enough clean electricity to make coal plants unnecessary. Fortunately, we know how to unleash private industry to produce clean electricity—pay them for it.
Germany figured this out and enacted “feed-in tariff” laws in 1991 that required utilities to buy solar power from homes and businesses at a price that often produces a return on the investment they make to install their solar systems. The results have been stunning. Germany, hardly known for sunlight, now boasts more than half the world’s solar power capacity. And it happened quickly. By distributing its generating capacity to where people live and work, Germany avoided the delays often associated with siting large, centralized facilities and building transmission lines to carry electricity from remote locations. To learn the basics on how feed-in tariffs work, see our special pullout, “Clean Break.”
Clean electricity does cost more, and utilities pass that cost on to consumers. In Germany the increase seems manageable. In fact, feed-in tariffs have produced a modest $4-per-month rise in the average household electricity bill, and in the long term that cost is expected to decline with increased volume and innovation. Most people understand that clean electricity costs more to produce. But many are reluctant to embrace approaches they’ll have to pay for in advance through higher taxes or utility fees so their money can be used as incentives for someone to produce more clean electricity later. With feed-in tariffs, consumers pay only for the clean electricity they use, when they use it. They aren’t asked to pay in advance and to trust that government or utilities will deliver later.
Six states, including California, are now considering feed-in tariff laws that would require utilities to pay people for producing clean electricity. If California gets such a law on the books, the Debs Park Audubon Center and thousands of other green entrepreneurs can become part of the solution to clean electricity. To find out how you can help fight global warming, go to audubon.org.
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