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“Protecting The Profits Of Big Carbon Barons”: Why Conservatives Are Trying To Strangle Solar Energy

As my colleague John Aziz wrote a few days ago, an alliance of right-wing operatives and Big Carbon barons are mounting a huge effort to try and throttle the solar industry in the crib. As the Los Angeles Times explains:

The Koch brothers, anti-tax activist Grover Norquist, and some of the nation’s largest power companies have backed efforts in recent months to roll back state policies that favor green energy. The conservative luminaries have pushed campaigns in Kansas, North Carolina, and Arizona, with the battle rapidly spreading to other states. [Los Angeles Times]

The Kochs and their allies argue that they’re just trying to get rid of unfair subsidies, but this is nonsense. Almost universally, utilities aren’t anywhere close to a free market. The most common model is the investor-owned regulated monopoly, where a particular firm is guaranteed a captive electricity market, and in return has to justify their prices to a government board so (in theory at least) they don’t gouge the public. (If you want all the details, David Roberts wrote a highly useful series of posts about utilities last year.)

According to American free-market dogma, such a frankly socialist production scheme should immediately collapse. But despite our generally low quality of governance, this set-up has actually worked (relatively) well for decades. The reason is that when we set these utility systems up, electricity was a picture-perfect example of a natural monopoly. Steam turbines exhibit large efficiencies of scale, so it makes sense to highly concentrate generation capacity, and alternating current allows electricity to be transmitted vast distances.

Solar throws a wrench into this long-standing model because it’s well-suited to individual generation. It would be very expensive and inefficient to build a coal-fired steam turbine in your backyard, but that works just fine for a solar panel. Therefore, something like 40 states have a policy called “net metering,” under which if you have a solar installation, any electricity you generate is canceled from your electric bill, and any excess you generate is sold back to the utility at retail rates. The problem with that, from a utility provider’s perspective, is that those retail rates don’t just cover the cost of generation — they also cover the construction and maintenance of the grid: power lines, transformers, and so forth. (As well as the investors’ profits.)

In essence, we’re trying to incorporate artisanal, small-batch electricity into a massive socialist production scheme based around colossal mega-generators. Unsurprisingly, it’s straining the system.

So enter the Brothers Koch (on Team Mega-Socialism, remember). And to be fair, they really do have a point: The grid is important to maintain, and it’s not exactly equitable for a quickly shrinking group of electricity customers without solar to bear most of the costs of maintaining it. (Though it’s important to also note that utilities tend to exaggerate the case. After all, any electricity generated at the point of use, for example, diminishes the load on the grid, thereby reducing costs.)

The problem, of course, is that the Kochs are not disinterested observers looking out for the little electricity consumer. They’re obscenely wealthy businessmen with enormous income streams at stake. Solar is a direct threat to their business model of selling climate-wrecking carbon to utilities, and as such, they’re obviously trying to use the political system to crush potential competition and protect their monopoly profits. That’s why this has become a heated fight only recently, as the overall price of solar electricity has fallen to be competitive with carbon sources in many places. Solar was a punch line until it was an economically viable alternative. And then it became a threat that must be destroyed.

So I don’t think Paul Krugman and Kevin Drum are quite right to say that conservatives’ fight against solar is simply an issue of tribalism. Clearly, this is also about the profits of very rich people.

In any case, what ought to be done? If solar were just one more generation model among many, we might say it’s not worth the effort. But with the catastrophic threat of climate change, it’s critically important to decarbonize electricity generation as quickly as possible, and solar must be part of that effort. We’ve got to find some way of maintaining the fixed infrastructure of electricity distribution without impeding solar’s deployment.

It’s a tricky problem. But the outlines of a solution ought to be fairly obvious: We should take a hard look at just how much centralized generation capacity is needed, and retire the carbon-intensive stuff as quickly as possible. (A carbon tax would help enormously here.) This means overhauling the regulated monopoly utility model, and will possibly require a new pot of money to maintain the grid until solar’s costs, which continue to plummet, can bear a few more extra fees.

But the details of implementation aren’t as important as the political and business implications. The Kochs, and all the other Big Carbon barons like them, would eventually be driven out of business by solar. In today’s GOP, billionaires who make a lot of money (even from socialist monopolies) are Galtian heroes. That’s why so many big money conservatives hate solar.

 

By: Ryan Cooper, The Week, April 22, 2014

April 23, 2014 - Posted by | Big Oil, Koch Brothers, Solar Energy | , , , , , ,

2 Comments »

  1. In-depth studies, carried out over the last 45 seconds, confirm there is a direct link between the climate and politics.

    Both climate and politics change over time !! A fact confirmed in the afore mentioned in-depth study.

    “Man” is the main cause of all political change, therefore “Man” is the main cause of climate change.

    The climate is seen as a problem if a particular political party is in power, whereas there is no problem at all to be see with the climate if the opposite party is at the helm.

    So, the simplest way to solve any climate problems is to keep that party “who see no problems”, in power.

    Not only will this save the Earth from certain destruction, it will save a lot of money in the national budget as there’ll be no need for climate science committees, reports, analysis, action etc.

    Prior to the 45 second in-depth study, a cartoon was created, which may, or may not, conflict with the theme of the above summary.

    That climate change cartoon is here . . . . . . . .

    http://cartoonmick.wordpress.com/editorial-political/#jp-carousel-775

    Cheers
    Mick

    Like

    Comment by cartoonmick | April 23, 2014 | Reply

  2. Mutual assured destruction or MAD was the cold war strategy of preventing nuclear war between the US and the USSR by each side threatening the other with total destruction if the other used nuclear weapons first in any conflict between the two. We have gradually moved away from MAD as both sides slowly reduce their respective nuclear arsenals. Today we face a different sort of mutual assured destruction, one using fossil fuels.

    Some are advocating that we increase our exports of petroleum products and natural gas from fracking in an effort to wean our European friends and allies from a dependence on those fuels as supplied by Russia. Russia is using its status as a major energy supplier to influence the policies of its former clients and member states in Eastern Europe, particularly in the Baltic states and Ukraine. Some of our policy makers believe that we can influence Russia with sanctions and by undercutting some of its energy dominance. Perhaps we can, but it will be at great cost.

    If we engage with Russia in an energy production race, it will be at the expense of both our environments, using land and water better spent on food production. What good will come from competing in and perhaps winning a fossil fuel production race if in the end we and perhaps Russia are left with devastated lands? That would truly be mutual assured destruction and it does not even begin to consider the additional environmental destruction caused by climate change and greater use of fossil fuels.

    If our policy makers, supported by an informed electorate, decide that weaning Europe from Russian energy sources is a worthy cause, then we should help supply our friends and allies with additional green energy. Rather than invest in a fossil fuel competition with Russia, let us finance research and development of additional green energy, green energy that does not force us to live with a scarcity of clean water, adequate food supplies, and a degraded environment.

    Like

    Comment by walthe310 | April 23, 2014 | Reply


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