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3.7.14

Solar industry fights loss of subsidies with bogus claim


Recipients of Louisiana’s second-biggest transfer of wealth by the state’s tax code, facing their lifelines potentially attenuated even further, are pulling out all the stops to keep utility ratepayers in the state to continue padding their bottom lines.



The last year has not been kind to solar energy system installers in the state. In 2013, the Legislature sunset the absurdly generous tax credit of 50 percent for installation, which when combined with the federal version meant 80 percent of an installation (roughly $25,000 on average residentially) could be paid for. This made installation companies sprout like mushrooms with money that would have gone to the state instead going to purchase their services, for a technology that continues to be low yield for high price.



Wisely, the credit was reduced to 38 percent, but even better it will go out of existence after 2017. This puts companies on notice that they need to be competitive in the market by then, this weaning being the intent of these kinds of credits. Understandably, this has caused a crisis among them, knowing that a lot has to happen in the next 42 months to allow them to become so or else most are going out of business.

A tactic they have attempted in order to ameliorate the coming industry catastrophe is to have the Louisiana Public Service Commission require that energy companies accept net metering at certain prices from solar systems customers. This means that companies are forced to buy power from their ratepayers with these systems when they can provide a surplus – which may for their purposes be too much at too high of a price relative to other sources of generating power. Current regulations create situations where companies pay excessive costs, which then can be passed along to all ratepayers and/or the companies’ shareholders have to eat it. In other words, ratepayers without solar systems and/or investors create an indirect subsidy for solar installers, because net metering ability as currently constituted becomes an incentive to purchase a system.



Commissioner Clyde Holloway understands this and this spring proposed to change the fee structure concerning net metering. It could include giving companies the options of whether to buy such power and reducing the price they would have to pay for it. But unable to gain majority approval to do so, instead the PSC decided to study the matter and produce a report after fall elections, where one presumed supporter and one presumed opponent of that idea likely will run for reelection.



To conduct the study, the PSC chose a firm a principal of which, LSUBR Prof. David E. Dismukes, caught the attention of the interest group representing the installation industry that fought tooth-and-nail to retain the credit. It now claims that because of his association with the firm that the report cannot be impartial, by pointing to monies that have financed his activities with LSU’s Center for Energy research (although the interest group, the Gulf States Renewable Energy Industries Association, carelessly implies that he received personally the money; in fact, it was for projects he participated in).



This argument falls back on a venerable rhetorical trick: getting receivers of information to believe that regardless of the quality of the data, logic, and argumentation used in research, any results cannot be valid because by definition they must reflect the biases of those conducting and/or funding it. It seeks to invalidate the conclusions not on the basis of the quality behind them, but to disqualify them automatically.



That kind of thinking in both research concerning the social and hard sciences should have died out centuries ago. Dismukes seems imminently qualified to oversee such a study, given his academic record that shows abundant peer-reviewed publications – meaning other experts in the area of study have agreed that his methods and conclusions are reasonably executed and drawn without (recognizing they may not have access to the data used) bias that runs counter to the generally-accepted theories and knowledge in the field. Included among these is a book about power systems and electricity markets.



The angle used here plays off of Dismukes’ reputation as a bĂȘte noire to the alternative energy industries’ penchant for enjoying tax credits without concern for larger economic concerns. But in these matters it’s not what somebody claims the author represents, it’s the quality of the product that determines the validity of any claims. And it’s disingenuous, if not hypocritical, for the glass-housed group to say a study should not be done with the participation of a certain person because of alleged biases he ineluctably must inject into it given financial arrangements made as part of his day job when the group itself has a compelling economic bias of its own in seeing that the study turns out a certain way.



There’s no reason why, after its completion, if in fact the study is tainted with bias in its construction that the group could not bring the issue in front of the PSC, demonstrating use of false information, problems with the methodology, selective use of data or information, etc., and ask that the PSC consider that prior to any actions to change the current regime of rules that favors the industry the group represents. Others have disputed Dismukes’ work before (in a different area) using similar tactics, and if there’s any credibility to those kinds of charges, that will become obvious, as has happened with the cottage industry that has sprung up around faith in significant anthropogenic climate change where evidence shows science has become corrupted by the agendas of the funders of those faithful.



The PSC has hired what appears to be an imminently qualified outfit to perform this study. There’s no reason to take seriously this premature complaint that would become appropriate only after the study has been completed and reviewed by observers external to the PSC.

1 comment:

Abhishek Gupta said...

Solar should be cost and technically competitive without subsidies of any kind. That is the only way to create a business, industry, market and a sustainable future. The price nose dive isn't really the end of it. There is still some scope of improvement, but the government might want to get out of the way of the solar industry.