Why the Kochs and the Walmart clan are trying to stop you from putting solar panels on your roof
A new rooftop solar system is installed every three minutes in the U.S., up from one every 80 minutes just eight short years ago. If this pace continues to accelerate or even just holds steady, it will not be long before solar panels become visible, if not ubiquitous, in many neighborhoods nationwide.
That prospect is enough to upset the Koch brothers, the heirs of the Walmart fortune and the utility industry, all which are trying to stamp out the rooftop solar movement or at least make a tidy profit penalizing the people who use it. With the help of powerful lobbyists and PACs like the American Legislative Exchange Council (ALEC) and Americans for Prosperity, they are set to do battle in statehouses across the nation in 2015.
ALEC, which receives much of its funding from the utility industry and fossil-fuel investors like the Kochs, has long been an opponent of renewable energy and the Obama administration’s effort to reduce carbon emissions. It’s working with conservative activists and corporate interests to fight homeowners who are installing solar panels on their roofs. Calling people who install rooftop solar panel “freeriders,” another word for freeloaders, the pro-corporate group is actively promoting legislation in states to charge fees, even exorbitant ones, for rooftop solar installations.
Behind the lobbyists are the megarich Walton family. The majority owners of the Walmart retail chain also own several energy interests, including a 30% stake in First Solar, which makes the parts for huge commerical installations of solar panels that operate like power plants. A recent report by the Institute for Local Self-Reliance shows that the Waltons are giving lobbyist organizations millions to attack renewable energy laws at the state level. Their prime targets are the homeowners and businesses that opt for solar panels to provide their own electricity.
“Rooftop solar in the U.S. is growing exponentially and more and more Americans have access to affordable solar power that cuts their energy bills and builds a more sustainable energy future,” says Erich Pica, president of Friends of the Earth. “Yet, the Waltons’ money is instead limiting average Americans’ ability to go solar and control their own energy future,”
Tag-teaming with the Koch brothers and some of the nation’s largest utilities, the Waltons are not being shy in browbeating state lawmakers and agencies to roll back or throw out their renewable energy policies. Over the past few years, they’ve bankrolled campaigns against residential solar in Arizona, Kansas, North Carolina, South Carolina, Ohio, Oklahoma and Washington. Results in these states have been mixed, so far.
In Arizona, Americans for Prosperity and First Solar were successful in securing fees on rooftop solar installations for the state’s energy utilities. Initially, the utilities asked for a $100-a-month surcharge, which would have utterly destroyed any economic incentive to opt for home-generated power. But with some pushback from state regulators, a compromise was reached, and the new fees for putting solar panels on a home now come to about $5 a month. As relatively small as it is, the new fee seems to have scared off would-be solar adopters in the Grand Canyon state. The thought of the “tax” increasing in coming years may have homeowners thinking twice about installing panels; rooftop installations in Arizona have dropped 40% since the compromise was reached.
While not going directly after homeowners with solar rooftops, ALEC was similarly successful in Ohio, making it the first state to hold back on new mandates for renewable energy generation. This had ALEC’s John Eick doing his happy dance. “[Ohio] may have laid the groundwork for other states to move in this direction in the coming year,” said ALEC’s legislative analyst.
Ohio’s 2008 standards had mandated that utilities sell an increasing amount of power generated by renewable or alternative fuels over time until it comprised a quarter of the state’s electricity output 10 years from now. It also mandated a sharp reduction in power consumption. Those requirements are now frozen for at least two years while a state legislative commission considers altering them.
Utilities Versus ‘Youtilities’
Why are conservative luminaries, corporate lobbyists, and the power companies pushing so hard against the little guy trying to save a few bucks while helping the planet? Because even though solar energy still only accounts for 0.23 percent of the nation’s electricity today, rooftop solar is a real threat to the very existence of utilities in the near future.
For utilities, the most immediate cause for concern is net metering policies in many states, which allow homeowners and businesses to sell back any excess electricity they create with their solar panels. The surplus electricity goes back into the power grid and is sold to other consumers at low rates, often lower than what the utilities charge for electricity themselves. John Eick told the Guardian that ALEC is worried about how individual homeowners are being compensated for feeding electricity back into the system. He said ALEC wants to reduce the rate homeowners are paid for direct power generation and perhaps even penalize homeowners for selling electricity back to the grid.
While power fed back to the grid from homeowners and businesses isn’t much of a threat to utilities currently, it will be in the near future as solar installations become more popular and affordable. Homegrown solar power, says the utility industry, may soon lay waste to the status quo. The industry’s Edison Institute released a report in 2013 in which it voiced this warning:
“[T]here is a perception that customers will always need to remain on the grid. While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent. To put this in perspective, who would have believed 10 years ago that traditional wire telephone customers could economically ‘cut the cord?’”
The Edison Institute further predicts that as more homes with rooftop solar panels are connected to the grid, the price to provide electricity to traditional ratepayers will rise, and will drive even more homeowners to rooftop. At that point “it may be too late to repair the utility business model.”
That time seems to be coming sooner than later. The prices of solar installations keep dropping and the technology behind home solar energy storage is rapidly progressing. Solar City, one of the largest rooftop solar leasing companies, is already marketing advanced battery backup systems to help owners of its solar panels store more surplus energy in the home, and they are doing so with one leader in battery technology, electric-car manufacturer Tesla Motors. (High-tech entrepreneur Elon Musk heads both companies.) And they are not alone; Solar City is being joined by several other technology upstarts in the sales of newer and longer-lasting battery backup systems.
It may only be a few short years, energy analysts say, before these battery backups evolve into systems that allow homeowners to untie themselves from the grid for good. But for now, they are nothing much more than relatively expensive (roughly between $2,000-$10,000) failsafes for infrequent power outages.
Right now, the utilities are more concerned about the grid-tied net-metering arrangements, since they’re starting to serve as virtual batteries for electric consumers. Rooftop solar panel installations on net-metering systems often produce excess power during the day and feed it back into the grid. When the home needs to tap into energy at night and on overcast days, the consumer often isn’t charged for the energy they use until they’ve spent all the credits they generated by selling energy through their panels.
So, utilities do not so much fear consumers leaving the grid, as they do the grid increasingly becoming a network over which they have little control. Rather than being a top-down supply chain of electricity from power plants, it becomes a web of sharing between consumers and commercial energy producers across North America. Electricity will be not a commodity, but a shared resource as consumers barter energy credits with the utilities and one another.
If everyone becomes an energy producer, it challenges and can even break the utility monopolies, transforming the system entirely. Home and business owners, as a network, will compete in an open market rising from the ashes of barren cartels. These corporations, still powerful today, foresee this doomsday scenario (for them) if they can’t rig the system to work solely for them.
This is why the Walton Family Trust, heavily vested in a future of immense solar arrays, with thousands of solar panels that amount to a power plant, instead of modest rooftop panels, are channeling their self-interest through corporate lobbyists. First Solar is a $6 billion corporation and the Waltons could lose their collective shirts if solar arrays turn out to be a bad investment.
The drift toward residential rooftop solar has been called a “revolution” by the Institute for Local Self-Reliance. “The Waltons claim to have a deep commitment to sustainability, but their support for anti-solar initiatives tells a different story,” says Stacy Mitchell, a senior researcher at ILSR. “The Waltons are investing in efforts that both undercut clean energy and prevent average Americans from benefiting economically from solar power.”
In short, the Waltons have a product on the market, and they want to stop their potential customers from producing this product themselves. In essence, they’re calling for a tax on individuals who harvest their own energy. If the Waltons tried to tax backyard vegetable plots because they sell tomatoes at Walmart, people would start to get the idea of what’s at stake here.
Is the Electric Company Too Big to Fail?
In the 16 states where electricity markets are deregulated, the utility industry looks quite different; that, is if you can figure it out. Gone is the monolithic power company that owned the powerplants and the web that brought energy to homes and businesses. While an electric utility is still a regulated monopoly that provides power to the region through its infrastructure, consumers can often purchase electricity from a variety of providers, or the utility may act as the consumer’s agent, buying energy from the market to resell. As murky as this may make the utility picture for consumers, it doesn’t change the basic fact that the ultimate goal of any electric utility to get as much energy through its network as possible. As long as those meters keeping spinning through the kilowatt hours, it’s easy money.
But what happens if those meters grind to a halt, or even run in reverse. Worse yet, what if electrical customers are now providing all the electricity they need during the daytime, when demand is at a peak and prices are high. How does the electric company make up for this? And what of the expensive solar arrays, nuclear power plants, coal- and natural gas-powered plants that might become idle? What happens to them when they’re no longer in critical demand during peak usage times, especially in the summer months when air conditioners may run throughout the day?
It’s hard to comprehend what happens in a world where electricity consumers are increasingly self-reliant. Is the future of the electric utilities to merely become sentinels of the grid? And what of power plants? Are they destined to become backup systems for dark hours and cloudy days? And what about the electric ratepayers who haven’t switched over to alternative energies such as solar or wind; do their rates skyrocket when it costs more per capita to service the grid and sell power? Will this eventually drive those ratepayers to renewable energy as well, the final sling taking down the electric Goliath? It’s hard to predict, but both alternative energy advocates and corporatists say it will be a game-changer within a few short years.
The ISLR is optimistic about a transforming market for consumers. “It’s moving the U.S. from a system in which electricity generation is controlled by a small number of investor-owned utilities and toward a future in which households produce energy and reap the financial benefits,” says its recent report.
No matter how you slice it, rooftop solar power creates uncertainty for the prototypical utility, mass energy provider and the corporations that build and provide resources to these facilities. And uncertainty is something corporations and their investors do not like.
So, if you’re the CEO of a large energy utility owner like Duke Energy, or you’re the Kochs, the Waltons or any other person or institution heavily vested in energy, you’ve got millions, if not billions, of reasons to circumvent and gut the competition. And because your chief rival is not another corporation, but millions of individual homeowners and businesses, you can’t buy them out directly, so you buy out their government representatives. In this era of Citizens United, nothing is stopping you from dispatching swarms of lobbyists to butter up or even threaten politicians to do your bidding. In 2015, this is the American way.