Impediments to Solar Power In North Carolina
A non-profit organization in North Carolina installed solar panels on a church and sold the power back to the church for half the price that was charged by Duke Power the main utility in the state.
The North Carolina Utilities Commission ruled that the group's arrangement with the Greensboro's church violated the state's system of legal electricity monopolies. The regulator hit the group with nearly $60,000 in fines, which would be suspended if it refunds the church's payments with interest and donates the solar equipment to the church.
"North Carolina by statute does not permit retail electric competition," the commission's order said.
A description of this decision can be found at the link below.
The above article mentions that North Carolina provides preferential tax treatment to solar power and a law requiring that 12.5% of power sold by utilities be obtained from renewable energy or improvements in efficiency,
However, the article below states that a tax credit for solar power in North Carolina was not renewed in 2015. The law requiring purchases of renewable energy or improvements in fuel efficiency still exists but conservatives want to abolish it.
Comment One: Since the late 1970s free market economists have pushed very hard to deregulate electric utilities and separate the market for production of electricity from its sale to customers. This deregulation effort, which has been supported by conservative politicians, should facilitate the sale of low-cost solar power. Apparently this approach has not been adopted in North Carolina.
Comment Two: One approach to the sale of solar energy would involve homeowners placing panels on roof and selling the excess energy back to the main utility. Utilities have resisted mandates to buy solar energy from homeowners in some states.
See link below for discussion of solar power purchases by utilities.
There are some costs associated with purchasing power from homeowners with solar panels but the main source of opposition for these purchases seems to be lower revenue from larger utilities. Again, deregulation does not appear to have benefited the solar industry.
Comment Three: The discussion of solar panel on the campaign has centered on how fast this market will grow. True to form both Hillary and Bernie want many solar panels to be installed with Bernie being more ambitious than Hillary. Neither candidate discusses the policy changes, which are needed to remove the impediments for increased use of solar. Sander’s view that special interests are blocking progress does appear to be supported by the North Carolina decision.
Comment Four: Most economists favor the use of carbon taxes to offset problems associated with global warming. A carbon tax would in theory assist firms and people who want to sell solar panel by increasing the relative cost of fossil fuels to clean energy. Many conservative businessmen favor carbon taxes over regulation but given the resistance of Duke Power and regulators to low cost solar power regulatory mandates for solar panel might be needed in addition to carbon taxes.
Concluding Thoughts: The regulator outlawed the sale of solar panel that was half the price of power sold by Duke Power. Why isn’t Duke Power embracing this lower cost alternative? There is something wrong with both the market and the politics of electricity in North Carolina.
Author's Note: Some of my posts on education issues have been well received.
this post suggests the most cost effective way to reduce the burden of college debt is to target financial aid towards first-year students in order to substantially reduce the amount of debt incurred by people who are just beginning their college careers.
This post examines President Obama's proposal to rank colleges based on costs, quality and the amount of debt incurred by students. The proposal was killed by university presidents.