In this issue: Cary agrees to fleece taxpayers and ratepayers with subsidized solar
By Dr. Michael Sanera
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Cary is the latest in a long list of North Carolina cities
and school districts to harm taxpayers and electricity ratepayers by jumping on
the solar bandwagon. The Cary city council
approved the solar
project outlined in The News & Observer on Tuesday. A private firm, Asheville-based FLS Energy, will install solar
panels on city-owned property. Cary will get rent, and FLS Energy will get taxpayer and
electricity ratepayer subsidies.
Unfortunately, the N&O ignored all of the important issues. For
example, who would pay for the project? Since the N&O coverage reads like the
city press release, why not just print that?
Here are just some of the facts the paper missed.
The reason that solar is so popular in North Carolina, a state that gets
only a middling amount of sunshine (see the National Renewable Energy
Laboratory solar maps), is
that the legislature passed SB 3 back in 2007, the law that requires power
companies to generate 12.5 percent of their electricity from renewable sources,
including solar, by 2021, with electricity ratepayers paying for much of the
cost of this expensive power.
At the time, the legislature was not concerned with the cost, but only with
responding to the pressure from environmental groups and the good press
"renewable energy" programs produce. Fortunately, the Beacon Hill
Institute in Boston was concerned with the cost and conducted this policy
study at the request of the John Locke Foundation. It shows SB 3 destroys
3,600 jobs, reduces disposable personal income by nearly $59 million, cuts the
state's gross domestic product by $140 million, and slashes state and local
revenues by $43.5 million by 2021.
Getting taxpayers and
electricity ratepayers to pay your electric bill
2010 N&O report about the Holly Springs furniture company OFM shows why
solar is so popular with private businesses and why it is such a bad deal for
taxpayers and ratepayers.
According to the numbers in the story, we can make a rough calculation of who
pays and who benefits. First, OFM gets the taxpayers to pay for half of the
cost of the solar equipment (i.e., half of $1.4 million, or $700,000). Then OFM
receives taxpayer-paid tax breaks worth $170,000. Then Progress Energy
ratepayers pay OFM 18 cents per kilowatt-hour for electricity produced by the
solar panels, while OFM buys power from Progress Energy for 6 cents per
kilowatt-hour to run its facility -- a net profit of 12 cents per
kilowatt-hour. Over 20 years, that would amount to a $1.2 million "profit"
from Progress Energy inflicted on ratepayers by the legislature when it passed
We must remember that OFM must pay for one-half of the cost of the solar
panels, but subtracting the $700,000 cost from the total subsidies above ($2.070
million), OFM gets a cool "profit" after that expense of $1,370,000
to its bottom line courtesy of North Carolina taxpayers and Progress Energy
And that is not all. OFM and other businesses that participate in this fleecing
of taxpayers and ratepayers get glowing media reports like this one.
OFM Celebrates One-Year Anniversary of
Solar Farm With Plans to Expand
Holly Springs, N.C. -- This month office and school furniture manufacturer,
distributor and wholesaler OFM is celebrating the one-year anniversary of the
250-kilowatt solar farm it installed on the rooftop of its headquarters in
Holly Springs, N.C. last August. The company has since been producing more
energy than it uses...
Why not expand when you can force taxpayers and ratepayers
to pay your electricity bills? Businesses that feed at the public trough are
nothing new. This example illustrates that the environmental movement is the
new home of crony capitalism, with taxpayer and ratepayer subsidies for solar,
wind, electric car batteries, new LED lighting, the list goes on and on.
Businesses get billions, politicians get good press, and taxpayers and
ratepayers get fleeced. For more details, see John Stossel's report on
Finally, we should learn from the solar experience in Germany, a country that
has used a similar solar subsidy system for a longer period of time. Ken Green,
an environmental scientist at the American Enterprise Institute, quotes this German university study's conclusion:
Policy makers should thus scrutinize Germany's experience, including in the United States, where there are
currently nearly 400 federal and state programs in place that provide financial incentives
for renewable energy.
Although Germany's promotion of renewable energies is commonly portrayed in the media as setting a "shining example in providing
a harvest for the world" (The Guardian 2007), we should instead regard the country's experience as a
cautionary tale of massively expensive environmental and energy policy that is
devoid of economic and environmental benefits.
Green notes: "Germany
is finding it hard to continue subsidizing wind
and solar power at existing levels. In May, the German parliament cut
back the subsidy for domestic rooftop solar photovoltaic systems by 16 percent,
with free-standing systems cut by 15
Given this evidence from Germany, the legislature should consider repealing
SB 3, especially given the state's budgetary problems and the slow job growth.
Conducting a "massively expensive" solar program that wastes
resources in this critical time for the economy is no way to get North Carolina
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Government Update archive.
Saturday, Sep. 10th, 2011 at 9:30am-3pm
A Citizen's Constitutional Workshop
with Dr. Troy Kickler & Dr. Michael Sanera
What the Founders and the State Ratification Conventions Can Teach Us Today