REPORT: The High Cost of Rooftop Solar Subsidies

WASHINGTON – Hillary Clinton has touted that her energy plan will result in over 500 million solar panels by 2020. That plan, however, will increase electricity prices for Americans—both consumers of solar power and consumers of traditional energy that subsidize solar power’s use of the electric grid.

Today the Institute for Energy Research released a report highlighting the severe costs that rooftop solar subsidies and state net metering policies impose on the American people. The report titled, “The High Cost of Rooftop Solar Subsidies,” prepared by Arduin, Laffer & Moore Econometrics, noted the following key findings:

Solar subsidies force poorer Americans to foot the bill for wealthier Americans

• Many states mandate that utilities pay residential solar power generators the full retail rate for electricity generated. This results in utilities paying two to six times the market price for energy.
• Net metering policies force non-solar customers to subsidize these extra costs.
• Solar consumers tend to be more well-off than non-solar customers, which means that less affluent Americans are paying for wealthier rooftop solar consumers.
• For example, Arizona solar customers avoid around $1,000 annually in electric grid costs. These costs are passed on to the average power users, who are typically less affluent.

Solar job growth is due to subsidies, but this likely results in fewer jobs overall 

• The solar industry tends to skew their jobs numbers by focusing on job growth rates instead of the absolute number of jobs added to the economy.
• Solar job estimates fail to account for jobs lost as a result of “the crowding out of cheaper forms of conventional energy generation,” “indirect impacts on upstream industries,” and from “the drain on economic activity precipitated by higher electricity prices.”
• In Germany, for example, net employment from their feed-in tariff system is estimated to be negative given “the resulting drain of purchasing power and investment in capital of private and industrial electricity consumers.”

“With the 2016 election moving closer, Democratic candidate Hillary Clinton has consistently touted her plan to install half a billion solar panels in her first term,” said IER President Thomas Pyle.

“While Secretary Clinton has painted a rosy picture of her plan, this new report shows that with the current federal, state, and local solar subsidies in place, Secretary Clinton’s solar plan will hurt the economy and make energy more expensive for American families—especially the poor and those on fixed incomes,” Pyle added.

Click here to read the full report.

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