Resolution Concerning Special Markets for Direct Solar Power Sales Exposed

Model Bill Info
Bill Title	Resolution Concerning Special Markets for Direct Solar Power Sales
Date Finalized	July 24, 2015
Date Amended	September 4, 2015
Date Accessed	May 2, 2018
Type	Model Policy
Status	Final
Task Forces	Energy, Environment and Agriculture
Keywords	Environment, Energy, Solar Power

Summary

This resolution reflects that 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. Creating such 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. Moreover, the overall economic impact of such 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.

Resolution Concerning Special Markets for Direct Solar Power Sales

WHEREAS, the solar power industry is pressuring the states to create special markets allowing the solar power industry to sell electricity directly to consumers; and

WHEREAS, utilities already purchase and produce solar power at the utility level and provide solar power to electricity consumers; and

WHEREAS, consumers are currently free to purchase solar power equipment and generate solar power for their own use; and

WHEREAS, federal, state, and local subsidies pay for a minimum of 30% of solar power equipment, and often much more; and

WHEREAS, every new increment of solar power necessarily increases overall taxpayer subsidies and resultant taxation to pay for the subsidies; and

WHEREAS, solar power subsidies go to the owners of solar power equipment rather than the purchasers of solar power; and

WHEREAS, direct solar power sales will take existing subsidies away from individual home owners and business owners with solar power equipment and give them instead to the solar power industry; and

WHEREAS, creating a special market for direct solar power sales will discourage the sale of solar power equipment to consumers while incentivizing industry to keep ownership of the equipment so that it may keep the consumers’ subsidies; and

WHEREAS, the vertical structure of the solar power industry and industry ownership of its own equipment incentivizes the solar power industry to overestimate the “fair market value” of its on-site equipment, and thus collect higher subsidies; and

WHEREAS, the solar power industry has used its power to write electricity sales contracts to severely disadvantage consumers regarding upkeep, maintenance, liability, home structural damage, and other terms and conditions of the contracts; and

WHEREAS, the subsidy rate for on-site solar power equipment is significantly higher than the subsidy rate for utility-scale solar power; and

WHEREAS, on-site solar power is substantially more costly to produce than conventional power and utility-scale solar power; and

WHEREAS, solar power receives substantially more subsidies than conventional power sources;

THEREFORE BE IT RESOLVED that the American Legislative Exchange Council encourages state policymakers to encourage free markets and affordable energy by refraining from granting special privileges to the solar power industry to sell electricity directly to consumers.

 

Approved by the ALEC Energy, Environment, and Agriculture Task Force at the ALEC Annual Meeting on Thursday July 23, 2015 and Friday, July 24, 2015. Approved by ALEC Board of Directors on September 4, 2015.