by John Lawrence
You want to reduce dependence on foreign oil, reduce carbon dioxide emissions into the atmosphere and stimulate the economy all at the same time? Then one change in the law could do all that and more. Simply require energy companies to buy back energy generated by homeowners who put solar panels on their roofs. Right now in many states like California energy companies will credit your account for excess solar energy generation that they allow you to sell back into the grid making in effect your meter run backwards. But that's not enough. Solar energy generation would skyrocket if the energy companies were required to take all the energy you could generate off your rooftop and pay you cash for it, not simply give you a credit. And the credit usually gets zeroed out at some point so its not cumulative. After that all the energy you put back into the grid simply goes to the energy company's profit margin.
Why not encourage the distribution of energy creation? If each homeowner could not only fill his or her own energy needs but also sell energy into the grid, there would be widespread benefits that would drive up property values and make it more desirable to own rather than rent although apartment owners and condo complex homeowners' assocations should be able to benefit also. And all that can be said for solar can also be said for wind power generation although suburban home owners' associations might frown on windmills in back yards. Not solar though. It would jump start the renewable energy revolution. People would buy more plug-in hybrids powering their transportation needs with self generated energy as well as their homes. This is exactly what Germany did which jump started their solar energy revolution and made them less dependent on foreign oil.
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The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG), enacted by the government of Germany, promotes the development of renewable energy sources with a feed-in tariff scheme. In conjunction with Germany’s climate preservation efforts, the ultimate objective of this legislation is to increase the amount of renewable energies in the German power supply to 12.5% by the year 2010. On the 1 January 2009 the latest version of the EEG came into force.
The fundamental idea of the EEG is that grid operators must pay a government-specified feed-in tariff to energy generators supplying energy to the grid from renewable sources. This feed-in tariff is intended to make energy from renewable sources cost-competitive with that from traditional sources, and it varies with the amount of energy generated by the producer and the type of renewable energy source. As an incentive to encourage technological advancements and cost decreases for parts and installation, the feed-in tariff drops yearly by a fixed percentage (degression rate).
Under the German electricity grid system, the grid operator is legally obliged to provide free access to the grid for all interested generators, and to pay the specified reimbursement for those suppliers qualifying under the terms of the EEG. No contract with the plant operator is necessary.
The Energy Feed-In Unit (Energieversorgungsunternehmen, or EVU) is responsible for calculating feed-in tariffs in an equitable way based upon current market prices of energy. Grid generators then pass the feed-in tariff costs down to end-consumers as an incorporated part of the final price seen on their energy bills.
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In Germany after the EEG was passed, whole solar energy farms sprung up. All it would take is a swift stroke of the pen at the US Federal level. After all why should energy companies care where they buy their energy? Why should some big coal fired energy generating plant be a more desirable source than the millions of roof tops of home and business owners? In order to make a profit, energy companies could buy wholesale and sell retail or the feed-in tariff idea could be utilized. Low energy consumers could still make money selling into the grid. This could offset the lack of jobs by making many homeowners proprietors of their own business - the business of owning mini energy generating plants.
There are already many financial incentives for offsetting the high initial costs of solar panel installation. And our "creative" Wall Street types, I'm sure, could devise more. This coupled with the prospect of actually making money off one's rooftop would solarize the nation in a hurry. The solar industry would add jobs making, installing and maintaining solar systems. The air quality would improve as more cars were powered by self generated solar power. The dangers of global warming would ameliorate. Home ownership would be subsidized. It seems like a win-win-win-win situation so why isn't the government doing this? It would cost them nothing. It would not add to the Federal debt. Indeed by improving citizens' financial outlooks, it would generate additional tax revenues.
Simply require energy companies to allow home and business owners to sell excess energy back into the grid for cash. It would reduce the capital requirements for energy companies to build more energy generation plants. It would reduce dependence on fossil fuels and the importation of oil from abroad. The value of desert real estate would increase. It would allow oil poor countries like the US to reduce their trade imbalance. Individual citizens would benefit and be empowered in more ways than one. The nation would benefit.
I have a feeling that something like this could be coming in 2010 as the Obama administration seeks to jump start the alternative energy industry and shore up its initiatives for a clean environment while subsidizing essentially the real estate industry. Homeowners could create real value in their homes by turning their homes into energy generation businesses. The technology is already here to make the electric meters spin backwards. It's a total no brainer. All gain and no pain except perhaps for the oil and gas companies. Oil consumption both for cars and for home heating oil would be reduced. The nation would gradually convert to having its energy needs provided by ubiquitous clean energy instead of by a dependence on foreign oil. And you would see a jump start in the economy that would rival the internet boom. The financial incentives for solar installations either by leasing arrangements or low cost loans have already been worked out. Maybe banks can redeem themselves and actually do some good here.
So come on Obama. What are you waiting for? But we all can expect that the party of "No," the Republicans, will vote against any legislation that would implement such a sane and prudent policy because their constituents, the oil and coal companies, would be deadset against it and would lobby the hell out of it. They would want to centralize and control any solar production themselves - not have it distributed among the population. So like many other great ideas, this one will probably go nowhere as we continue to depend on foreign oil, despoil the environment and languish in the new economy of increased joblessness and reduced incomes for the middle class.
