Don's Tuesday Column

              THE WAY I SEE IT   by Don Polson Red Bluff Daily News   5/15/2018

                “Stupid” gov’t mandated home solar

California has officially “jumped the shark,” energy, housing and public policy-wise, as the California Energy Commission (CEC) has mandated that new homes be built with rooftop solar power starting in 2020. Hello to an additional $10,000 added onto the cost of a home; goodbye to any hope for lowering the highest electricity costs in the nation. For a rather flattering take, look up “California Becomes First State to Order Solar on New Homes” (Bloomberg.com)

George Orwell said, “Some ideas are so stupid that only intellectuals could believe them.” In this case, only green-eye-shade worshipers—at the church of perpetual renewable energy promises—could buy into yet another massive intrusion into economic reality. For a more realistic, sober perspective, look up “California’s Suicide Attempt, Part 6: Let’s Make Housing More Expensive!” by S. Hayward, Powerlineblog.com.

Nationwide, solar and wind account for a fairly small, relatively unreliable portion of America’s energy needs. You have the irony of excess production during periods of intense sunlight or high winds, creating negative pricing (meaning it has to be given away, even paying other states to take it), together with the need for nearly full time backup from reliable fuel power plants when it’s cloudy or not windy. “Texas and California have too much renewable energy” (TechnologyReview.com).

Don’t worry that the cost for the same amount of (unreliable) electricity is far higher than what coal, oil or natural gas energy cost, which can be ramped up for peak usage. “In fact, residential solar systems cost between 12.9 and 16.7 cents per kilowatt-hour averaged over their lifetime, according to a National Renewable Energy Laboratory report last year. That’s more than double the cost of utility-scale solar systems, which range from 4.4 to 6.6 cents…

“But this feel-good change to the building code is a questionable public policy for cutting greenhouse-gas emissions. The big problem with the California Energy Commission’s new mandate…is cost” (Technology Review). Places like Minnesota have found that, due to the need for carbon-intensive backups, the overall reduction in so-called greenhouse gas emissions turns out to be less than in other states that avoided the renewable bandwagon.

This quote from Severin Borenstein, a professor at the Energy Institute of the Haas School of Business at UC Berkeley, sent to the CEC sums it up: “I, along with the vast majority of energy economists, believe that residential rooftop solar is a much more expensive way to move towards renewable energy than larger solar and wind installations. The savings calculated for the households are based on residential electricity rates that are far above the actual cost of providing incremental energy, so embody a large cross subsidy from other ratepayers.”

I sat in on a pitch given to a neighbor from a solar company representative (self-described as a “technical adviser” rather than a salesperson) and heard basically the same thing: “Well, yes, your neighbors who don’t have rooftop solar are the ratepayers whose increased bills subsidize your solar power, but that means you would be wise to get into the installation queue ahead of them.” The big question that is skirted around repeatedly is how much the system actually costs when you factor in the subsidies—from your neighbors via PG&E, local utilities and government redistribution.

I was in numerous sales jobs and am quite familiar with the technique of “minimizing the cost” by using the smallest relevant period—day, month, year, etc. There’s nothing inherently deceptive about it. We focus on the monthly mortgage, auto loan or installment payment; we also focus on the price of the home, car, furniture or trinket. The “global cost”—production of materials, installation, wages—of the solar system, whether rooftop or massive array in the desert, is what it is; the cost is not reduced by government subsidies, incentives, tax breaks or reimbursements by PG&E for excess electricity they buy back. For rooftop solar, it’s probably $20,000+, not $10,000. Low ball estimates are disingenuous.

Now we must examine the housing issue and the predictable impact on the (nearly) highest-in-the-nation cost of a home. An additional $10,000 on the purchase price means roughly $30,000 more for the life of the loan; it also means a higher income to qualify for a loan and a bigger down payment. Translation: the opposite of “affordable housing.” Not to worry as these same wizards of smart will no doubt respond with heart-string-tugging calls for more housing subsidies. “It’s not fair” to make a profit off of needy homebuyers, they’ll no doubt bleat.

Think existing homes won’t be affected? That would be naïve; homes without rooftop solar will sell for less, initially. However, the competition for such homes will inevitably lead to higher prices while existing homes with solar will be both unable to add the cost onto their asking price while also becoming less affordable in the process. Who could have foreseen the likely disruption and chaos? Anyone familiar with fallout from government mandates, that’s who.

Prepare to be outraged: Indications are that Obama’s FBI had an “asset,” placed or recruited to spy on/in the Trump campaign. If true, it represents the darkest sort of intrusion by a sitting president’s operatives into an opposing candidate’s political campaign in American history. The Wall Street Journal’s Kimberley Strassel, National Review’s Andrew McCarthy and the New York Post’s Paul Sperry are reporting, summed up by Sperry, “DEVELOPING: A major new front is opening in the political espionage scandal. In summer 2016, Brennan with his FBI liaison Strzok, along with help from Kerry @ State, were trying to set Russian espionage traps for minor players in the Trump campaign through cultivated intel assets.” To be continued… .