If an odd coalition of environmentalists and conservative activists have any say in the matter, the sun may shine brighter on the solar industry in Florida.
Florida has plenty of sunshine and people. Despite being the third most populous state in the nation, it ranks thirteenth among the states for solar power. A group of business owners, political libertarians, liberal environmental activists, and Christian conservatives blames state law for the shortage of solar power, and they want to change it.
According to Fox News (Feb. 21), “The coalition launched a campaign in January to place an initiative on the state’s 2016 ballot that would eliminate restrictions it says are suppressing the solar industry and protecting utilities from competition.”
“‘Florida is the best solar market in the eastern United States, and it’s clearly underperforming,'” said Stephen Smith, executive director of the Southern Alliance for Clean Energy,” Fox News reports.
Law Protects Monopoly
The restriction in question is a law prohibiting third-party from nonutility companies, companies which owns electricity generating equipment or facilities that it sales to homes or businesses, from installing solar panels on residents’ or businesses’ rooftops and selling them the power generated. Florida is one of only five states prohibiting such arrangements. It allows only utilities to sell electricity to ratepayers.
Nonutility solar providers allow consumers to avoid the initial costs of installing solar panels while locking in fixed electricity rates. Providers recover the installation costs and make a profit from long-term contracts signed by those receiving the panels.
The initiative ending the utilities’ monopoly and allowing nonutility sales will require more than 680,000 signatures to qualify for the ballot.
‘Initiative Is a Great Idea’
“The initiative is a great idea. It would open the market to competition and give more energy at lower prices,” said Charles Steele, the Herman and Suzanne Dettwiler Chair in Economics at Hillsdale College. “The irony is that at one time electricity production was considered a natural monopoly and the regulatory apparatus was set up to protect consumers. Now the regulatory bureaucracy is being used to protect the monopolies and hurt the consumer,” Steele added.
Steele says innovations benefiting consumers will likely arise if the initiative succeeds.
“These new technologies should be allowed to compete freely in the market,” Steele said. “They should not be subsidized, but neither should they be hamstrung for the sake of protecting older, established firms. If we want our energy problems fixed, the best thing we can do is to free up the market. The most efficient firms and technologies will win, and consumers will be better off.”
For Steele, the initiative drive is a logical choice, “[I]t’s not surprising that this be done by initiative instead of legislatively. Long-established firms find it easier to lobby than to compete in the free market, so citizens have to take matters into their own hands through the initiative process,” Steele said.
H. Sterling Burnett, Ph.D. ([email protected]) is a research fellow with The Heartland Institute