The solar industry would have Floridians believe the constitutional amendment it proposes via a group called Floridians for Solar Choice (FSC) is a free market initiative, claims Tallahassee think tank James Madison Institute. That's how the media are portraying it.
But a new JMI policy paper called “Solar Carve-Outs in the Sunshine State” claims nothing could be further from the truth.
The paper's bottom line reveals if the ballot initiative wins, Florida ratepayers will wind up bearing the brunt of an estimated $1.1 billion cost shift, and that is just a modest estimate.
"This is one industry carving out a market share for itself in the Florida Constitution," said Bob McClure, CEO for JMI. "It's crony capitalism at its worst."
Furthermore, the paper's authors say, the amendment won't do much to save the planet.
Talking to the press on a conference call Wednesday, representatives from conservative JMI and the Heartland Institute identified solar energy as a media darling. Just because FSC opposes monopolistic public utilities and big business, doesn't make the amendment good for the Florida economy, the ratepayers or the Constitution, the representatives said.
“This proposed amendment violates free markets, violates limited government, and discourages affordable energy,” said senior fellow James Taylor with the Heartland Institute, who worked with JMI on the policy paper.
Sal Nuzzo, JMI vice president of policy, explained that public utilities are required to maintain 100 percent of grid capacity "regardless of whether the locations are generating their own power through wind or solar or any other renewable source."
Using data available from both the Florida Public Service Commission, the Solar Energy Industry Association and others, the report features an impact model built for both residential and commercial consumers. It found that in year three of implementation at a modest 8 percent solar market penetration rate a $740 million cost shift in residential and $381 million in commercial would take place.
The report explains that in order to make sure solar users don’t go without electricity in periods of prolonged lack of sun, existing energy providers are required by regulation to ensure 100 percent capacity in their area, even when a business or residence is partially or completely off the grid.
“The language of the proposed amendment forbids Florida energy officials from having on-site solar providers or purchasers pay a proportionate fee for grid maintenance and capacity costs,” said Taylor. “This amounts to an additional subsidy, whereby all electricity consumers who do not generate or purchase on-site solar must pay the costs for those who do.”
The FSC effort also stands to manipulate the Florida Constitution to create a monopoly for the solar industry that depends on special interest subsidies and special regulatory treatment to gain advantage over the competition, pinpoints the report.
Says JMI, "The U.S. Energy Information Administration reports that over the life span of new solar power facilities going online in 2016, the resultant solar power will remain five times more expensive than the natural gas power that generates the majority of Florida electricity." So, homeowners and businesses that get a 30 percent subsidy for installing solar equipment now, will get a further subsidized ride on Florida ratepayers' backs.
"The answer isn't to embed crony capitalism into the Constitution, the answer is for the solar industry to produce a more reasonable product," said Taylor. "That's how the free market works."
The amendment, if passed, effectively gives the solar industry an exclusive right to sell electricity outside of the current framework in the specific market segment, setting solar power companies up to function as a utility, says the JMI paper. While Florida energy officials have put in place rules designed to ensure utility transparency and consumer protections, the language of the FSC amendment forbids Florida state officials from giving consumers the same protections in regard to the solar power industry that they receive when purchasing power from utilities.
“When you peel back the carefully crafted language used to market this amendment, it is clear the Floridians for Solar Choice effort is seeking an end-run around market economics,“ said Taylor. “Although the language of the amendment makes it seem like barriers do exist, currently the electricity market contains no government barriers against solar power. To the contrary, preferential subsidies, tax exemptions and market-share mandates benefit solar power at the expense of other renewable energy sources.”
JMI writes in an accompanying press statement, "Unable to produce a market-competitive product despite these subsidies, solar energy comprises less than 1 percent of the total electricity generation in the U.S. According to a 2014 Brookings Institution study, solar power is the most expensive and most heavily subsidized form of electric power generation. "
At least 345 programs at the federal level alone provide taxpayer support to the solar industry, apart from the staggering 30 percent subsidy offered against the cost for solar power equipment and projects, the report points out.
Here's the rub: Under the FSC proposed amendment, the solar power industry, not individual Floridians, will receive the taxpayer subsidies. The report says "the shift in who receives the subsidies will inevitably cause money to move out of Florida, as most of the companies that manufacture and install on-site solar power equipment are out-of-state corporations."
Debbie Dooley, president of Conservatives for Energy Freedom, the Green Tea Coalition, issued an online statement Wednesday opposed to the JMI policy paper.
"It is unfortunate and also predictable that the fossil fuel-funded, monopoly-utility front groups James Madison Institute and Heartland’s James Taylor created a bogus report on the Floridians for Solar Choice ballot amendment. How is it that the James Madison Institute -- which professes to support economic freedom, limited government and personal liberty -- opposes competition and props up monopoly utilities? True conservatives value free market and competition. ..."
The Floridians for Solar Choice was not responding Wednesday.
The FSC amendment is the only one out of the two energy amendments to receive approval from the Florida Supreme Court. The deadline for the initiative to submit the necessary signatures to be placed on the ballot for voter consideration is Feb. 1.
Said James Madison CEO McClure, “As the effort continues to gather signatures from people across the state, our report aims to educate Floridians on the costly potential downfalls of this particular amendment’s implementation. It’s essential that people have a better understanding of the policies put in front of them by well-funded public relations campaigns. Our goal is to illuminate the facts hidden among the buzzwords so that Floridians can make a more informed decision.”
Reach Nancy Smith at nsmith@sunshinestatenews.com or at 228-282-2423. Twitter: NancyLBSmith
