Solar power: How to get there?
Apparently, according to Cole County Circuit Court Daniel Green, the way ahead envisioned in Proposition C is illegal, leaving in doubt the future of commercially developed solar power in Missouri.
I did not like Proposition C, the initiative approved strongly in 2008 by voters who, I thought, acted with a poor understanding of alternative energy realities. Prop C requires utilities to get 2 percent of electric generation from renewable sources this year, growing to 15 percent in 2021. Some of this must come from solar power. To get there, the law mandates hefty rebates by utilities for users of solar energy systems.
This very meddling with the free marketplace is enough to discredit this law, but Judge Green found an even more decisive problem: The forced rebate amounts to an unconstitutional taking of private utilities’ property.
The basic problem here is the ongoing need for substantial government subsidies to keep fledgling alternative energy initiatives alive. Think ethanol subsidies and mandates for blending with gasoline, and mandated reliance on wind and solar by producers of electricity.
To mandate such reliance by a public purveyor amounts to a rate increase on consumers. The rebate mandate on a private utility will amount to the same and is an illegal taking, says Judge Green.
The politics of energy rate-setting muddy this picture. Ameren, Kansas City Power & Light and other private utilities no doubt would build the $2-a-watt rebate into their rate-base calculations underpinning successful rate increase requests before the state Public Service Commission and effectively passing the rebate cost to all ratepayers. So the utilities would rebate to users of solar systems, and all users of their electricity from whatever source would foot the bill.
This is what will happen if the city of Columbia loses money on its alternative energy usage mandate that is being implemented incrementally.
I believe any close look at the future of solar energy reveals it is most viable as a user point product, meaning central power plant generation will not pay off like solar generation at the point of use might. This was the general conclusion of a task force gathered months ago to advise on the city’s contemplated solar energy program. Solar energy would make more sense in the form of solar panels on a user’s rooftop to power water heating and other in-house use than as an adjunct to central power plant production.
The main problem with solar and wind energy is their unsure nature. If energy could be generated and stored like water, wind and solar would make more sense. Also, initial capital costs of these alternative generators are too high to be competitive, requiring public subsidies that will extend into the foreseeable future, perhaps forever.
We are wrestling with the question whether cost and adequate supply are to be the predominant factors. Traditional market considerations clearly favor existing sources of energy. To justify alternatives requires political decisions confounding or ignoring the ordinary marketplace.
To confound the untrammeled effect of the free marketplace is risky and sure to be costly to consumers. So far the supposed benefits of alternative energy are elusive and pursued at great expense to the public, but powerful political arguments drive us forward, not least the myth that we can or should be energy-independent.
Among the nations of the world, some will be energy exporters and some will be importers. As long as we can import most efficient basic energy supplies at favorable cost, we will do so. The likelihood that suppliers will refuse to sell at market prices is nil. Our experimentation with alternative energy is likely to be a peripheral factor forever, mitigated by more effective ways, such as conservation, to reduce reliance on imports.
To mandate use of alternatives in the face of effective conservation efforts is to skew our energy mix toward the least effective and most expensive. We should abandon free markets in energy with great trepidation, continually wondering whether alternatives make sense.
HJW III
-Henry J. Waters III
