When it comes to solar power, many in the ‘Show Me State’ have seen enough. That’s because Missouri’s aggressive solar rebates are not only threatening to raise power prices, but are taking solar providers on a wild ride.
According to a recent report by Jeffrey Tomich of EnergyWire, “Solar installers, the businesses supposedly causing heartburn for old-school utilities across much of the country, are staring at their own “death spiral” in Missouri.”
Voters of Missouri in 2008 green-lighted a rebate program for solar adopters, pumping $175 million in subsidies into the state’s solar market. Predictably, home owners were fast to take take advantage of the rebate, leading to a boom for residential solar providers. Now, with the funding dried up, those same solar companies are faced with laying off workers. The executive director of the Missouri Solar Energy Industries Association calls the experience a “solar roller coaster.”
To its credit, the Missouri rebate program has led to significant gains in the state’s solar generation capacity. At the close of 2013, Missouri ranked 17th nationally in installed solar with 39 megawatts of capacity. Estimates are that figure could rise to as much as 110 megawatts by the middle of 2014. But that’s what happens when government injects taxpayer capital to support a particular industry, particularly when that subsidy is tied to a requirement that Missouri generate 15% of its electricity from renewable power by 2021.
With a $2 per watt rebate, Missouri residents, many of whom were unable to afford solar power with subsidy, rushed to take advantage of the rebate. In response, lawmakers reduced the rebate to $1.50 per watt. It still wasn’t enough to stop the customer feeding frenzy. Missouri’s two largest utilities soon warned that the changing marketplace would cause power rates to rise. It’s the same situation that many customers in California, Hawaii, Arizona, and elsewhere faced as they began picking up more of the tab for their utility’s fixed cost, while solar owners avoided paying their fair share.
PACE has made its views clear, warning that lawmakers and regulators must work diligently to ensure that solar subsidies don’t become tantamount to a regressive energy tax. Working together toward sensible solutions, government and the solar industry can create sustainable program that everyone – including non-solar customers – can live with.