Why conservatives are trying to strangle solar energy

As my colleague John Aziz wrote a few days ago, an alliance of right-wing operatives and Big Carbon barons are mounting a huge effort to try and throttle the solar industry in the crib. As the Los Angeles Times explains:

The Kochs and their allies argue that they're just trying to get rid of unfair subsidies, but this is nonsense. Almost universally, utilities aren't anywhere close to a free market. The most common model is the investor-owned regulated monopoly, where a particular firm is guaranteed a captive electricity market, and in return has to justify their prices to a government board so (in theory at least) they don't gouge the public. (If you want all the details, David Roberts wrote a highly useful series of posts about utilities last year.)

According to American free-market dogma, such a frankly socialist production scheme should immediately collapse. But despite our generally low quality of governance, this set-up has actually worked (relatively) well for decades. The reason is that when we set these utility systems up, electricity was a picture-perfect example of a natural monopoly. Steam turbines exhibit large efficiencies of scale, so it makes sense to highly concentrate generation capacity, and alternating current allows electricity to be transmitted vast distances.

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Solar throws a wrench into this long-standing model because it's well-suited to individual generation. It would be very expensive and inefficient to build a coal-fired steam turbine in your backyard, but that works just fine for a solar panel. Therefore, something like 40 states have a policy called "net metering," under which if you have a solar installation, any electricity you generate is canceled from your electric bill, and any excess you generate is sold back to the utility at retail rates. The problem with that, from a utility provider's perspective, is that those retail rates don't just cover the cost of generation — they also cover the construction and maintenance of the grid: power lines, transformers, and so forth. (As well as the investors' profits.)

In essence, we're trying to incorporate artisanal, small-batch electricity into a massive socialist production scheme based around colossal mega-generators. Unsurprisingly, it's straining the system.

So enter the Brothers Koch (on Team Mega-Socialism, remember). And to be fair, they really do have a point: The grid is important to maintain, and it's not exactly equitable for a quickly shrinking group of electricity customers without solar to bear most of the costs of maintaining it. (Though it's important to also note that utilities tend to exaggerate the case. After all, any electricity generated at the point of use, for example, diminishes the load on the grid, thereby reducing costs.)

The problem, of course, is that the Kochs are not disinterested observers looking out for the little electricity consumer. They're obscenely wealthy businessmen with enormous income streams at stake. Solar is a direct threat to their business model of selling climate-wrecking carbon to utilities, and as such, they're obviously trying to use the political system to crush potential competition and protect their monopoly profits. That's why this has become a heated fight only recently, as the overall price of solar electricity has fallen to be competitive with carbon sources in many places. Solar was a punch line until it was an economically viable alternative. And then it became a threat that must be destroyed.

So I don't think Paul Krugman and Kevin Drum are quite right to say that conservatives' fight against solar is simply an issue of tribalism. Clearly, this is also about the profits of very rich people.

In any case, what ought to be done? If solar were just one more generation model among many, we might say it's not worth the effort. But with the catastrophic threat of climate change, it's critically important to decarbonize electricity generation as quickly as possible, and solar must be part of that effort. We've got to find some way of maintaining the fixed infrastructure of electricity distribution without impeding solar's deployment.

It's a tricky problem. But the outlines of a solution ought to be fairly obvious: We should take a hard look at just how much centralized generation capacity is needed, and retire the carbon-intensive stuff as quickly as possible. (A carbon tax would help enormously here.) This means overhauling the regulated monopoly utility model, and will possibly require a new pot of money to maintain the grid until solar's costs, which continue to plummet, can bear a few more extra fees.

But the details of implementation aren't as important as the political and business implications. The Kochs, and all the other Big Carbon barons like them, would eventually be driven out of business by solar. In today's GOP, billionaires who make a lot of money (even from socialist monopolies) are Galtian heroes. That's why so many big money conservatives hate solar.