FOR IMMEDIATE RELEASE: November 16, 2015
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Proposed Floridians for Solar Choice Amendment
Would Create a $1.1 Billion Cost Shift to Ratepayers
~ A constitutional carve-out for solar, the most expensive and subsidized energy option, would have a negative impact on Florida’s economy states latest policy brief from The James Madison Institute ~
TALLAHASSEE – As two energy amendments continue through the ballot approval process in Florida, The James Madison Institute (JMI) released a policy brief, “Solar Carve Outs in the Sunshine State,” revealing the economic bearing for Floridians, upward of $1.1 billion in cost shift to ratepayers, and additional negative policy outcomes of the potential passage of the Floridians for Solar Choice (FSC) amendment.Using data available from both the Florida Public Service Commission and the Solar Energy Industry Association among many others, the report features an impact model built for both residential and commercial consumers. It found that in year three of implementation at a modest 8 percent solar market penetration rate a $740 million cost shift in residential and $381 million in commercial would take place.The report explains that in order to ensure that solar users don’t go without electricity in periods of prolonged lack of sun, existing energy providers are required by regulation to ensure 100 percent capacity in their area, even when a business or residence is partially or completely off the grid.“The language of the proposed amendment forbids Florida energy officials from having on-site solar providers or purchasers pay a proportionate fee for grid maintenance and capacity costs,” said policy brief author James Taylor, a senior fellow with JMI and the Heartland Institute. “This amounts to an additional subsidy, whereby all electricity consumers who do not generate or purchase on-site solar must pay the costs for those who do.”The FSC effort also stands to manipulate the Florida Constitution to create a monopoly for the solar industry that depends on special interest subsidies and special regulatory treatment to gain advantage over the competition, pinpoints the report. The amendment, if passed, effectively gives the solar industry an exclusive right to sell electricity outside of the current framework in the specific market segment, setting solar power companies up to function as a utility. While Florida energy officials have put in place rules designed to ensure utility transparency and consumer protections, the language of the FSC amendment forbids Florida state officials from giving consumers the same protections in regard to the solar power industry that they receive when purchasing power from utilities.“When you peel back the carefully crated language used to market this amendment, it is clear the Floridians for Solar Choice effort is seeking an end-run around market economics, “said Taylor. “Although the language of the amendment makes it seem like barriers do exist, currently the electricity market contains no government barriers against solar power. To the contrary, preferential subsidies, tax exemptions and market-share mandates benefit solar power at the expense of other renewable energy sources.”Unable to produce a market-competitive product despite these subsidies, solar energy comprises less than 1 percent of the total electricity generation in the U.S. According to a 2014 Brookings Institution study, solar power is the most expensive and most heavily subsidized form of electric power generation. Additionally, the U.S. Energy Information Administration reports that over the life span of new solar power facilities going online in 2016, the resultant solar power will remain five times more expensive than the natural gas power that generates the majority of Florida electricity.At least 345 programs at the federal level alone provide taxpayer support to the solar industry and federal taxpayers pay a staggering 30 percent of the cost for solar power equipment and projects, the report points out. Under the FSC proposed amendment, the solar power industry, rather than individual Floridians, will receive the taxpayer subsidies. The shift in who receives the subsidies will inevitably cause money to move out of Florida, as most of the companies that manufacture and install on-site solar power equipment are out-of-state corporations.The Floridians for Solar Choice amendment is the only one out of the two energy amendments to receive approval from the Florida Supreme Court. The deadline for the initiative to submit the necessary signatures to be placed on the ballot for voter consideration is Feb. 1.“As the effort continues to gather signatures from people across the state, our report aims to educate Floridians on the costly potential downfalls of this particular amendment’s implementation,” said Dr. Bob McClure, JMI president and CEO. “It’s essential that people have a better understanding of the policies that are put in front of them by well-funded public relations campaigns. Our goal is to illuminate the facts hidden among the buzzwords so that Floridians can make a more informed decision.”The report also underscores the purpose of Florida’s Constitution to guarantee the inalienable rights of Floridians and states that details of Florida’s electricity mix are not a constitutional issue. If this amendment passed, it would be the first time an industry would receive a carve-out embedded directly in the Florida Constitution.“The Florida Constitution would no longer be a sacred document that protects our freedoms and sets the ground rules for our representative government. It would instead become a trough for pork-barrel favoritism and consumer restrictions that would become the coveted prize of crony capitalism,” said McClure. “To the extent that any energy industry, solar, wind, coal, natural gas, seeks to gain a greater share of Florida’s electricity market, their proper course of action should be to first produce a more economical product.”The report concludes that under free-market conditions, the most economical, affordable and abundant energy sources will succeed in the marketplace without government interference or assistance. Government should have no need to encourage and promote any particular form of energy when all energy sources are allowed to freely compete for market share, and therefore encouraged to offer competitive pricing and desired features to benefit the consumer.“Creating a distinct new electricity market and giving the solar power industry the exclusive right to provide power within that market runs counter to free-market principles,” said Taylor. “Solar power should receive no special market-share carve outs, no special subsidies, and no special regulatory treatment – no industry should.”For further information about JMI, please visit www.jamesmadison.org.
###Trusted Solutions for a Better Florida: Founded in 1987, The James Madison Institute (JMI) is one of Florida’s oldest and largest nonpartisan, nonprofit research and educational organizations. JMI is dedicated to maximizing opportunities for all by promoting economic freedom, limited government and personal liberty. Learn more about JMI at www.jamesmadison.org. Twitter: @JmsMadisonInst – Facebook: facebook.com/JamesMadisonInstitute