Net Metering–Another “Renewable” Subsidy that Needs to Be Eliminated

In an efficient electrical generation system each source of electric power would compete against all other sources in terms of cost and reliability, and the result would be that only the most efficient sources would actually supply electricity. This would result in lower power costs and increased reliability of the system compared to the present heavily politically-influenced electrical system.

Since non-hydro “renewable” sources offer no advantages over fossil fuel or hydro systems, but rather greatly reduce the reliability of the network and increase the costs of electricity, there is no reason to offer subsidies for non-hydro “renewable” systems. But many states do just that at the household level. They pretend that electric power generated by household solar panels is worth just as much as fossil fuel power provided by local electric utilities, but this is hardly the case.

This is often implemented at the household level by what is called “net metering,” where the homeowner only pays for the net inflow of grid electricity after subtracting the outflow of “excess” “renewable” power. Fortunately a few states, such as Vermont and New Hampshire, are trying to address this inequity by reducing the rates paid at the household level for non-hydro “renewable” power in calculating household electricity bills. The non-hydro “renewable” sources are only worth a fraction of fossil fuel generated electricity since they are unreliable and force electric utilities to use electricity that they do not want and cannot usefully use.

There are other subsidies for non-hydro “renewable” electricity, of course, such as the Federal production tax credit, but they are much better known. So this post is focused on the substantial subsidies offered by states through net metering at the expense of householders that do not use non-hydro “renewable” sources.

via Carlin Economics and Science

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July 27, 2018 at 11:11PM

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