State officials in Florida and New Jersey have ended taxpayer-funded solar rebate plans because of high costs and lack of funding.
Huge Rebates Lured Many
In Florida, homeowners were eligible for rebates up to $20,000 for photovoltaic systems, and businesses could get rebates up to $100,000. Homeowners could also receive $500 rebates for solar thermal systems, and businesses $1,000.
The offers of huge rebates generated substantial interest. One solar company, Brite Sky Solar LLC, reported $8 million worth of applications for the rebates. The withdrawal of taxpayer subsidies will reduce that level of interest.
Without $14.4 million in federal stimulus dollars, the program would not have made it through last year, Bruce Kershner, executive director with Florida’s Solar Industries Association, told the Orlando Business Journal. More than 8,000 applicants requesting $25 million worth of rebates had sought the stimulus funds. Within months, all the money was gone and the program was scheduled to phase out in June 2010.
Subsidies ‘Never Work’
That is what’s wrong with energy programs that require taxpayer subsidies to operate, said Robert McClure, president of the James Madison Institute.
“Government subsidizing this kind of activity never works. Voting to give away someone else’s money in the form of this kind of tax subsidy is bad policy,” McClure said. “It would be far better, and Florida’s recent past was quite good on this until a couple of years ago, to reduce regulations, taxes, fees, and other costs on companies that are trying to innovate in this area.”
That would open the doors to competition and let “entrepreneurial energy” bring the lowest costs to consumer, McClure said.
Florida governor Charlie Crist (R), has called for state laws to compel electric utilities to generate 20 percent of their electricity via renewable energy by 2020. The legislation did not pass, though Crist vows to continue pushing for mandatory solar power production.
Same in New Jersey
New Jersey is undergoing a similar experience. Legislators enacted a homeowner solar installation rebate program, then discontinued it in May because of high costs and budget constraints.
“For decades we have been told that solar power is the future and it soon will be economic. We heard that 30 years ago, and we continue to hear it today. We can’t subsidize inefficient, uneconomic energy sources forever, as New Jersey’s actions show,” said Daniel Simmons, director of state affairs for the Institute for Energy Research.
“Governments are not good at picking energy winners and losers. Let solar compete in the market, and someday it might be competitive,” Simmons added.
Cheryl K. Chumley ([email protected]) writes from Virginia.