It always feels awkward to be that guy pointing out that the “good deals” offered by government take from other people, many of whom are poorer than the person getting the deal. A couple of holidays ago, it was my brother in law and his wife, talking about this great program to replace their light bulbs to save on their energy bills with practically no investment, courtesy of the energy company.
It didn’t go over well when I explained that their savings would drive up rates for everybody, effectively increasing the energy bills of their neighbors. And, since the people with the time and wherewithal to research these programs will tend to have higher average income than those who lack those resources (who’ll also be less likely to own their homes), the program is little more than a transfer of wealth from the poorer to the wealthier on a large scale.
Robert Bryce made the same point in a recent Wall Street Journal op-ed, in which he (tongue in cheek) thanks taxpayers for subsidizing his money-saving solar panel installation:
… fewer rooftop solar projects are being installed in low-income neighborhoods. That’s true in California, which leads the country in solar-energy capacity. According to a study done for the California Public Utility Commission, residents who have installed solar systems have household incomes 68% higher than the state average. Ashley Brown, executive director of the Harvard Electricity Policy Group, calls the proliferation of rooftop solar systems and the returns they provide to lucky people like me, “a wealth transfer from less affluent ratepayers to more affluent ones.” It is, Mr. Brown says, “Robin Hood in reverse.” …
But don’t trouble me with all that. I’m doing my part for the polar bears. Indeed, I’m a prime example of the “green” economy: I’m socializing the costs of my scheme and privatizing the profits. And I’m feeling virtuous while doing so.
It doesn’t get much better than that.
The other day, a young woman came to the door selling a new solar panel arrangement. From the quick front-step pitch, it sounds like the company merges the alternative-energy-company model with subsidies for solar installations. Basically the company becomes a household’s energy provider and leases space on the roof (for decades) to generate power. In very high-production months, National Grid will send the homeowner a check, but in general, the household will just pay lower bills through this alternative company.
Of course, there are more-traditional ways of doing the solar-panel installation that leave the homeowner owning the system at almost no cost. Even if the numbers work out, though, I don’t know if I could take advantage of it; Bryce is right: These green schemes are just a way for wealthier people to feel good about taking money from less wealthy people.