Re: Florida, the Sunshine State, Is Slow to Adopt Rooftop Solar Power
The New York Times has published a revealing piece about how Florida has low household solar penetration compared to some Northern states, because households canít sell their energy back to the grid. My question Ė why are buyback schemes needed to make Solar attractive? If the raw economics of solar made any sense, buyback schemes would not be needed to make household solar attractive. Householders could simply switch off the grid supply, and switch their house to cheaper rooftop solar supply, to reduce their electricity bills.
According to the CDC Wonder site, Florida receives an average of 18,581.94KJ/m2 of sunlight every day, but New York State only receives 13,933.79KJ/m2. Solar panels in Florida receive 33% more sunlight than solar panels in New York State.
If solar panels donít help reduce household bills in a sunny state like Florida, where owners receive 33% more return on investment, how can they possibly make economic sense in New York State?
The reason has to be market distorting government subsidies and energy policies. Government subsidies and energy policies in this case are self evidently causing tremendous resource misallocation, motivating the installation of solar panels in less sunny states. My evidence for the resource misallocation is the simple fact that if market signals were working properly, nobody would install solar panels in less efficient northern locations, until they ran out of optimal southern installation opportunities.
Of course, even sun drenched Florida households are not installing solar panels Ė because without generous taxpayer funded power buyback schemes they donít make economic sense. Without subsidies, solar panels canít compete with cheap, reliable, 24◊7 fossil fuel or nuclear generated electricity available straight out of the wall socket.
This gross resource misallocation is a big deal. The money wasted by market distorting government subsidies in New York State could have been spent on hospitals, police, or badly needed infrastructure repair. Or it could simply have been left in the pockets of taxpayers.
Worse, the subsidies for solar panels tend to disproportionately hit poor people. The recipients of these market distorting subsidies are the rich and middle class. Whether they pay through state taxes, or the cost is passed on via electricity bills, poor people who donít own a home with a nice big South facing roof get slammed Ė they end up helping to pay everyone elses electricity bill in addition to their own.
The Times wishes Florida would follow New York Stateís example, by implementing regressive taxes on poor people to subsidise the electricity bills of the middle class. Let us hope Florida sticks to their principles, and continues to refuse to impose this cruelty tax on the poor.