The Fox News reports on solar power that included interviews in Boise came out Wednesday and as expected they made the issue about subsidies.
But the reporting, which included both a news report and a bizarre interview on Fox and Friends, only scratched the surface about the role of the free market in the energy debate and included some comical conclusions.
Producer Jim Springer reported on-line that the reductions of subsidies leads some to conclude that the future of solar power is dimming. In fact, the opposite is the case.
Springer reports that investor-owned utilities are having to raise rates on non-solar customers to cover the costs of the infrastructure to serve them. Because they use less energy, he says the utilities have to shift the costs to the customers who are using more energy.
He interviews Courtney White, who has been the subject of much of my reporting about Idaho Power’s proposed quadrupling of rates for many customers of its net metering system, which allows them to sell back surplus power to the utility at retail rates.
And he interviews Republican Rep. George Eskridge, of Dover.
“To me, the test is how cost-effective it is,” he told Fox News. “When solar is more expensive than other resources, I don’t think the other consumers in the system should have to subsidize that power resource.”
What Springer left out of his reporting were the benefits the solar customers give to the rest of Idaho Power’s customers. When they are producing power in the summer it would cost Idaho Power far more than retail rates to replace it during peak periods.
The company that has a monopoly over power distribution in its area is replacing that power with sources it builds and gets approval to pass on the cost of to its customers. The Idaho Public Utilities Commission then approves a set rate of return that goes to its shareholders.
So the solar customers, who are paying the capital costs themselves, are saving the other customers money over the long-term, as long as the fixed costs for the utility are not enormous. This is the balancing act Fox ignored.
But the most laughable reporting came on Fox and Friends when Fox Business reporter Shibani Joshi talked about why Germany has had so much success with rooftop solar while the U.S. has lagged behind.
“They’re a smaller country, and they’ve got lots of sun. Right? They’ve got a lot more sun than we do,” Joshi told anchor Gretchen Carlson. “The problem is it’s a cloudy day and it’s raining, you’re not gonna have it.
“Here on the East Coast, it’s just not going to work,” she said.
Germany has more sun? Media Matters, a liberal group critical of Fox News had a field day with that.
Germany’s success with solar is directly tied to its generous subsidies and how it has integrated renewable energy into its grid. It has no more sun than the East and a heck of a lot less than we have here. In fact Slate reported that according to the U.S. Department of Energy’s National Renewable Energy Laboratory, most of the U.S. gets more sun than Germany, which is more like Alaska.
They are eliminating many of their subsidies there because solar panel prices have come down so much that it is competitive with other new sources of power. Germany is allowing people to put solar on their homes instead of subsidizing new nuclear power plants.
Remember, every new source of power costs more than legacy sources such as hydroelectric dams.
Fox had a real opportunity to talk about the potential role of freeing up energy markets to help consumers and give them more choices. To its credits Fox’s reporters did not demonize subsidies pointing out we have subsidized the tech industry, the nuclear industry and even the oil and gas industry.
But it made the mistake many people who are looking at the solar industry in the U.S. make. They mixed the solar manufacturing industry, which has had mostly failures competing against the Chinese, with the solar installation and production business.
It is thriving due to low prices and the U.S. failure has come not because we don’t have enough sun. Unlike Germany we haven’t learned how to integrate it into our political and regulatory system yet.