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July/August 2012 Rooftop Revenue

Government helps big corporations make billions off green energy. How about cutting the average family in on the deal?

By Anya Schoolman

Is it really possible to create a system that allows the great mass of ordinary people to earn a return selling the energy they produce? Consider the case of Germany. In 1991, the country determined that the best and most equitable way to spur the development of renewable energy was to incentivize its own citizens to produce it. So it created a system of so-called “feed-in tariffs,” whereby any homeowner, farmer, church, or small business owner can set up a solar, wind, or geothermal production facility on their property and send the excess energy back to the grid with virtually no restrictions or permits required. These small-scale producers get fixed, long-term contracts for their energy designed to deliver a profit of 7 to 9 percent. As a consequence, nearly 900,000 Germans have become renewable energy entrepreneurs, and Germany itself now gets more than 20 percent of its electricity from renewable sources.

Making feed-in tariffs work in the United States is tough because, unlike in Germany, regulatory authority here is fragmented among federal, state, and local agencies. Still, plenty can be done to make the American system more amenable to small-scale green energy producers.

First, every state should require that utilities allow net metering so that small-scale suppliers—homeowners as well as renters, small businesses, and nonprofits—have the basic ability to send any excess energy they produce onto the grid. This right to “produce your own juice” would seem like a no-brainer. But most utilities are deeply resistant to the idea because the more power comes from many small producers, the more the whole centralized- production-and-control business model that has defined the industry for more than a century is threatened.

Second, all states should have renewable portfolio standards with carve-outs for small-scale green producers. This too would seem like common sense. But it runs against the interests of the big solar and wind companies and their Wall Street backers, who want to keep the government-subsidized profits from green energy for themselves. And sadly, major environmental groups, eager to get as much renewable energy on line as fast as possible, have advocated strenuously for the federal subsidies that enrich the big green power companies but have put much less effort into lobbying for changes that allow average people to join in.

Third, more should be done to give individuals the choice to own, rather than lease, solar panels, so they can reap the greater financial rewards. Right now, even those who know they have the option are often dissuaded from buying their own panels because of the up-front costs. A big part of the problem is that the contractors who sell and install solar systems for people like Rob and Sherrill—typically local firms that don’t have big Wall Street money behind them—can’t necessarily arrange financing for those systems, especially for people with lower incomes or whose mortgages are under water. Such financing, however, could arise naturally in the marketplace with some modest changes in regulations—for instance, allowing those who want to own their solar panels to pay off the purchase and installation costs as a percentage of the return on their future energy output.

The federal government could mandate many of these changes. Though the political barriers would certainly be immense—millions of unorganized homeowners are no match for the concentrated lobbying power of utilities and megabanks—the political rewards would be great, if leaders were willing to change the way they think and talk about green energy. Until now, elected officials who support renewable power have stressed its environmental benefits and potential to create “green jobs.” Yet the number of Americans who can realistically imagine themselves working in a green job is limited, whereas every American family gets an electric bill, and two out of three own their own homes. The prospect that anyone could turn an unused roof or piece of land into a moneymaking asset, and help the environment in the bargain, ought to be hugely appealing.

Americans know in their guts that an economy that relies so heavily on ever-higher levels of consumer spending and debt, as ours does, isn’t healthy. We need to become a nation of savers and producers again. Giving every American the chance to produce and sell green energy at a fair price is a good way to begin.

[Return to The Future of Success in America]

Anya Schoolman is the executive director of the Community Power Network and the president of DC Solar United Neighborhoods. She has a 2.4-kilowatt solar energy system on her roof.

Comments

  • MichaelF on July 18, 2012 4:35 PM:

    Just left a comment over at Ed Kilgore's post linking to your article. I've got a grid tied 2Kw system that feeds the local utility during the day...at least when the central air conditioner isn't running (I leave the a/c on while I'm out both for the cat and because I don't want too much expansion/contraction on the various studs/joists of what's a fairly old structure). Louisiana, surprisingly, has both net-meter laws and generous tax credits, though I'm guessing the credits are as much anti-tax zealotry as promotion of renewable energy. Still, it worked out well for me: my bill is generally about 25 percent lower and will hopefully go down further if/when I can afford a more energy efficient air conditioner.

  • Shokai on July 22, 2012 10:02 AM:

    Yeah, if the average person doesn't start to benefit from green legislation, people are gonna start doing this to their children: http://youtu.be/kogUBtaf_-U

  • Milena on October 22, 2012 2:01 AM:

    Just curious how green the solar panel itself... I think that the energy profit is still a little bit over the zero, that is - the amount of energy used to create the panel is just a bit less than panel goes to generate over it's life... Milena.