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Renewable energy is good, but not perfect

by Former Rep. Silvestre Reyes (D-Texas), opinion contributor - 09/26/17 6:00 PM ET

No issue is immune from partisan politics anymore, including how this nation produces electricity. For example, the environmental movement, and the wind and solar industries, were critical of a new report from the Department of Energy. This is because it asserted that subsidies for those industries are partly to blame for the early closures of what should be profitable coal and nuclear power plants.

I understand the concerns of the environmentalists, especially since the abundance of cheap natural gas is a major driver of the closure of older power plants; not just Obama-era policies that favor wind and solar.

{mosads}I do support most subsidies and incentives for wind and solar and I am not unaware that there are consequences to these policies. Low and moderate income Americans are sometimes disadvantaged by the government favoring the renewables industries.

Perhaps the most obvious way that government subsidies for renewables hurts consumers, is it’s support for the rooftop solar industry that is filled with bad actors. I call them bad actors, because they employ sales tactics that are intended to mislead potential customers about the total cost of the rooftop solar panels and how much those panels will save them on their electric bills.

In fact, because of the cost of the solar panels, and the size of the loan to purchase or lease them, many homeowners end up paying more every month, not less, for their electricity.

Recently, the director of the Consumer Federation of California penned an op-ed about potential problems with the solar industry. He pointed out that some rooftop solar companies do not inform people that using a “government backed” loan program to get their panels, will raise their property taxes.

Also, that the loan to purchase the panels generates another lien against their home, which can lower the value of the house or make it harder to sell.

The piece states that “homeowners have paid solar-financing companies $20,000 to $30,000 to buyout the lease and clear the way for a sale to a buyer who refuses to take over a costly decades-long payment obligation.”

If these abuses continue, serious scrutiny will have to be given the government subsidies for wind and solar that makes these renewables more affordable. So long as the renewables industry does not police itself, the risk of regulatory action at the federal and state level remains unacceptably high.

If the CFPB, Department of Justice, or other state regulators have to take action against these industries, there will undoubtedly be — perhaps justified — calls to reduce the subsidies that are still critical in order to make wind and solar affordable for thousands of Americans. The current political debate doesn’t seem to acknowledge how quickly the progress on renewables could unravel if the bad actors continue to damage the reputation of the sector.

In addition to these consumer protection concerns, the current solar subsidies could make parts of America more vulnerable to natural disasters. The electrical grid in my state of Texas actually proved to be very resilient during Hurricane Harvey and we have to acknowledge that a big reason the electricity continued to flow to the majority of customers in the Houston area, despite the widespread flooding, was the $500 million that the local power company invested in fortifying the grid after Hurricane Ike struck in 2012.

As the threat from extreme weather continues to rise along the Gulf Coast, more investment in grid infrastructure is needed. However, the solar subsidy system known as net-metering reduces the number of consumers contributing to the upkeep of the grid. As renewables proliferate, we should review the incentive structure to ensure that everyone is paying their fair share toward grid resiliency.

After all, protecting the grid — which benefits all Americans — should not just be the responsibility of both the utilities and people unwilling or unable to afford solar panels.

While I believe the government is right to spur the development of renewables, we must also strive to ensure those industries, especially the solar industry, have safeguards in place. This will help to prevent them from abusing customers and that any government subsidies do not shift the burden of grid investment onto other predominantly low income consumers.