Conservative Legislators Vote to Oppose Direct Solar Sales

Published December 3, 2015

America’s most prominent group of conservative legislators has approved a model resolution opposing a market-share carve-out for direct solar power sales. The American Legislative Exchange Council (ALEC), which brings together conservative legislators from around the country, approved the model resolution. 

According to the ALEC resolution, “creating a special market for the solar power industry to sell electricity directly to consumers increases subsidies, electricity costs, and taxes while shifting costs to non-solar customers.”

Individuals and businesses may already purchase solar power equipment and generate their own electricity. The solar power industry, however, is supporting market-share carve-outs to allow the solar power industry keep ownership of the equipment – and the government subsidies given to the owners of solar power equipment – and sell solar power rather than the solar equipment directly to consumers. Such arrangements also allow the solar power industry to serve as a de facto utility without submitting to utility regulations.

Legislators on ALEC’s Energy, Environment, and Agriculture Task Force approved the resolution opposing direct solar sales by unanimous vote on July 24 at ALEC’s 2015 Annual Meeting. The ALEC Board of Directors approved the resolution on September 4. 

Commenting on the reason ALEC approved the model resolution, ALEC’s  Energy, Environment and Agriculture Task Force Director John Eick said, “History has long shown that free markets are more effective than heavy-handed government regulatory or subsidy schemes at achieving optimal economic and environmental outcomes.” 

“With this in mind, any efforts for governments to create what is essentially a monopoly privilege for one source of energy over another is bad policy and should be resisted, and that’s why ALEC passed this model resolution,” said Eick.

Special Significance in Florida

The issue is hotly contested in states like Florida, where the solar power industry supports amending the state constitution to require state government to “encourage and promote” solar power and give the solar power industry – and the solar power industry alone – the right to place equipment directly on personal or business property and sell electricity to the owners of the property.

“Creating such [solar power industry] special markets in the states is especially troubling and antithetical to free markets when solar power alone is given the monopoly right to sell power directly to consumers from on-site equipment. Any electricity market reforms must not designate a single energy source for a new monopoly privilege,” the ALEC resolution explained.

The resolution noted solar power receives far more subsidies than conventional power, and government efforts to promote solar power therefore increase subsidies and the tax burden necessary to pay for them.

“The overall economic impact of such [electricity market] reforms must not increase electricity costs, increase electricity subsidies, or increase necessary taxation. Creating a special market for the solar power industry to sell electricity directly to consumers violates all of these prerequisites,” the ALEC resolution observed. 

“We see evidence around the country — and particularly here in Florida — of the problems that arise when government meddles in the electricity market,” Americans for Prosperity Florida state director Chris Hudson told Environment & Climate News.

“People should of course be free to put solar panels on their home, but they should not be forced to subsidize the choices of their neighbors,” Hudson explained. “American taxpayers and ratepayers deserve an energy policy that allows energy sources to compete on their merits — not on special favors. The fact that this resolution passed at ALEC shows state legislators are waking up to the problems of solar energy subsidies.”

James Taylor ([email protected]) is senior fellow for environment policy at The Heartland Institute