Power Politics: Government Regulation of Solar Power

Understanding the GOP’s civil war over off-the-grid energy and government regulation of solar power.

| Summer 2016

If politics makes for strange bedfellows, few issues make for more peculiar sleeping arrangements than that of distributed energy. There aren’t many others that put former Republican congressman (and son of “Mr. Conservative” himself) Barry Goldwater Jr. on the same side as the Sierra Club. But when it comes to efforts by electrical utilities to add special fees for homes that use rooftop solar, Goldwater sees his opposition as the truly conservative stance.

“Technology is kind of replacing the old order,” Goldwater said recently. “There was a place for utilities and monopolies when they were first created, but the time has come for a change.” Viewing emerging technologies like solar as a means of adding competition to what has traditionally been a very uncompetitive sector, Goldwater formed TUSK — Tell Utilities Solar won’t be Killed — an organization that fights for policies friendly to distributed rooftop solar power.

Not all conservatives see things this way, however. Some conservative Republicans have found themselves in the unusual position of advocating stricter regulation and higher fees for distributed-energy generation. In Arizona, legislators recently tightened restrictions on solar leases, mandating more disclosure about lifetime cost to customers and giving homeowners a three-day grace period to get out of a solar contract after it’s been signed. The author of the legislation, State Senator Debbie Lesko, is a Republican whose campaign website stresses the importance of “limiting taxes and government regulation.”

The conflict scrambles political loyalties because it goes back to competing visions from the beginning of electrification. When Thomas Edison drew up the plans, the electrical grid was envisioned as a highly decentralized affair, with small power plants in each neighborhood. But with the advent of alternating current, it became possible for much larger plants to supply power over great distances. While the modern grid is a technological marvel, the politics of how it operates are less impressive: with a few exceptions — notably Texas — power generation is not open to competition. Instead, electrical generation is controlled by monopoly utilities and subject to stringent regulation on everything from the prices that can be charged to the mix of fuel sources that can be used.

But the allure of a decentralized power system never completely went away, and the rise of environmental concerns has led to widespread public support for cleaner forms of energy, which are often — as in the case of solar panels — more decentralized and distributed. For decades, a small proportion of consumers have opted for some form of distributed power. (When I was growing up in the 1980s, our semi-rural home used solar panels to heat water from our well.) Nevertheless, the growth of distributed energy has been limited by high costs, which have to be paid upfront, as well as by problems of intermittency.

That may now be changing. Since 2009, prices for solar power have fallen 70 percent. These declining costs, along with a healthy helping of government subsidies, have led to a rapid increase in solar deployment. And in April, Tesla Motors announced its new Powerwall battery, which can store excess electricity generated by solar during the day for use during less sunny periods.