The Koch Brothers’ Dirty War on Solar Power
After decades of false starts, solar power in America is finally poised for its breakthrough moment. The price of solar panels has dropped by more than 80 percent since President Obama took office, and the industry is beginning to compete with coal and natural gas on economics alone.
But the birth of Big Solar poses a grave threat to those who profit from burning fossil fuels. And investor-owned utilities, together with Koch-brothers-funded front groups like American Legislative Exchange Council (ALEC), are mounting a fierce, rear-guard resistance at the state level – pushing rate hikes and punishing fees for homeowners who turn to solar power. Their efforts have darkened green-energy prospects in could-be solar superpowers like Arizona and Nevada. But nowhere has the solar industry been more eclipsed than in Florida, where the utilities’ powers of obstruction are unrivaled.
The Sunshine State has the best solarity east of the Mississippi, and the third-best rooftop solar potential in America. Yet measured by solar production, it ranks just 16th in the nation. It’s dwarfed by solar giants like California. Florida even lags behind Northern states like New Jersey, Massachusetts and New York. “It defies logic,” says former Florida Gov. Charlie Crist. “It’s absolutely absurd.”
The solar industry in Florida has been boxed out by investor-owned utilities (IOUs) that reap massive profits from natural gas and coal. These IOUs wield outsize political power in the state capital of Tallahassee, and flex it to protect their absolute monopoly on electricity sales. “We live in the Stone Age in regard to renewable power,” says state Rep. Dwight Dudley, the ranking Democrat on the energy subcommittee in the Florida House. “The power companies hold sway here, and the consumers are at their mercy.”
The full political might of Florida’s IOUs was on display in December, when a deceptive campaign, funded by the state’s electric utilities, crushed a citizen-led effort to open Florida to solar competition through the 2016 ballot. “When your opponents have no ethical foundation, have unlimited resources and are willing to say and do anything to defeat you,” says Stephen Smith, director of the Southern Alliance for Clean Energy, which led the pro-solar effort, “it’s a tough hurdle to overcome.”
It should come as no surprise that the utilities have fought so hard. The rise of cheap, distributed solar power poses a disruptive – and perhaps existential – threat to the traditional electric utility business.
Monopoly electric utilities used to make sense. Dirty power, generated at a distance from population centers, was carried over a set of transmission lines to homes and businesses. Consumers got reliable power from a single provider. IOUs were guaranteed a profit – both for building power plants and transmission lines as well as for the electricity itself.
But in recent years, the nation’s IOUs have been abusing their monopoly powers to profit from massive infrastructure projects. Utilities more than doubled their capital expenditures last decade; costs were paid for by electric customers, whose power bills have soared nearly 40 percent. For investors, the formula is simple: More infrastructure equals more profit.
The rise of distributed solar power poses a triple threat to these monopoly gains. First: When homeowners install their own solar panels, it means the utilities build fewer power plants, and investors miss out on a chance to profit. Second: Solar homes buy less electricity from the grid; utilities lose out on recurring profits from power sales. Third: Under “net metering” laws, most utilities have to pay rooftop solar producers for the excess power they feed onto the grid. In short, rooftop solar transforms a utility’s traditional consumers into business rivals.
The surge of solar competition has caught the nation’s dirty-power generators flat-footed: The utility trade group Edison Electric Institute (EEI) warns that rooftop solar could do to the utility industry what digital photography did to Kodak, bringing potentially “irreparable damages to revenues and growth prospects.”
Few industries are worse equipped to deal with disruption than power utilities. Their profits depend on infrastructure investments that pay off over a generation or more. “Utilities are structured to be in stasis,” says Zach Lyman, partner at Reluminati, an energy consultancy in Washington, D.C. “When you get fully disrupted, you’ve got to find a new model. But utilities are not designed to move to new models; they never were. So they play an obstructionist role.”
