California taxpayers spent $8.5 billion on solar subsidies

[brenthutch 444]

Why do they need subsidies when solar is the most economical? No wonder folks are leaving in droves.

https://oilprice.com/Latest-Energy-News/World-News/California-Taxpayers-to-Foot-85-Billion-Bill-for-Rooftop-Solar-Subsidies.html

Edited August 26, 2024 by brenthutch

[kallend 2,027]

In 2022, fossil fuel subsidies in the United States totaled $757 billion, according to the International Monetary Fund. 

[Phil1111 1,149]

The Nissan leaf and Chev Bolt are the cheapest US built EVs at about $30k each

33 minutes ago, kallend said:

In 2022, fossil fuel subsidies in the United States totaled $757 billion, according to the International Monetary Fund. 

If the US stopped sucking at the teat of the oil industry it would buy 25 million Bolts or Leafs every year. Which is about 1.6 times annual US sales.

[jakee 1,489]

What it calls a subsidy is the difference between the price paid /kw now vs the price paid /kw to those on legacy contracts. But what is each kw actually worth? Can't really say what the subsidy actually is without knowing that. Now why are subsidies necessary? Well, show me any energy infrastructure project that doesn't get subsidies. 

So where are the folks going who leave? To Tennessee for example, where they spent $1.3Bn (a higher proportion of their GSP) on a football stadium instead? https://reason.com/2023/04/26/stadium-subsidy-stupidity-hits-new-record/

Ok, maybe not there. But I'm sure there is a state somewhere that doesn't use taxpayer dollars to subsidise anything not completely necessary. Yeah, real sure.

[kallend 2,027]

19 minutes ago, jakee said:

  . . . . .  football . . . . .  

But, but, that's different!

[tkhayes 348]

16 hours ago, brenthutch said:

Why do they need subsidies when solar is the most economical? No wonder folks are leaving in droves.

https://oilprice.com/Latest-Energy-News/World-News/California-Taxpayers-to-Foot-85-Billion-Bill-for-Rooftop-Solar-Subsidies.html

your headline is false.... you claimed they have spent the money.... the article mentions spending as "will have to fund subsidies'.....  you are skewed once again, in your view but alas, expecting a correction for you is like hoping the sun is coming up in the west this morning.

California generates 47TW of solar power today, so the $8.5B in subsidies adds up to $0.00018 per KWH.

Please describe your financial tragedy in dollars and cents..... like I just did.

[brenthutch 444]

2 hours ago, tkhayes said:

your headline is false.... you claimed they have spent the money.... the article mentions spending as "will have to fund subsidies'.....  you are skewed once again, in your view but alas, expecting a correction for you is like hoping the sun is coming up in the west this morning.

California generates 47TW of solar power today, so the $8.5B in subsidies adds up to $0.00018 per KWH.

Please describe your financial tragedy in dollars and cents..... like I just did.

It is a wealth transfer to those who have solar panels paid for from folks who don’t. 
 

“Yet those who had signed up for the subsidies before that year will continue to receive their higher rates, while Californians without rooftop solar installations will have to pay higher electricity rates, effectively shouldering the subsidy burden.”

Edited August 27, 2024 by brenthutch

[brenthutch 444]

4 hours ago, jakee said:

What it calls a subsidy is the difference between the price paid /kw now vs the price paid /kw to those on legacy contracts. But what is each kw actually worth? Can't really say what the subsidy actually is without knowing that. Now why are subsidies necessary? Well, show me any energy infrastructure project that doesn't get subsidies. 

So where are the folks going who leave? To Tennessee for example, where they spent $1.3Bn (a higher proportion of their GSP) on a football stadium instead? https://reason.com/2023/04/26/stadium-subsidy-stupidity-hits-new-record/

Ok, maybe not there. But I'm sure there is a state somewhere that doesn't use taxpayer dollars to subsidise anything not completely necessary. Yeah, real sure.

Texas, Florida, South Carolina and other Red states are prime destinations for expats from the Peoples Republic of California.

[jakee 1,489]

1 hour ago, brenthutch said:

It is a wealth transfer to those who have solar panels paid for from folks who don’t. 

What about wealth transfers to people who own power stations from people who don’t?

The Budget proposal must include language to eliminate subsidies for the oil and gas industry, including the Water’s Edge Election and Research and Development credits. Eliminating
these subsidies and tax benefits could result in over $7 billion of recovered funds that can be directed toward California’s clean air and climate programs.

https://theclimatecenter.org/wp-content/uploads/2024/04/End-Fossil-Fuel-Subsidies-Fact-Sheet.pdf

[jakee 1,489]

1 hour ago, brenthutch said:

Texas, Florida, South Carolina and other Red states are prime destinations for expats from the Peoples Republic of California.

Because they don’t subsidise anything with taxpayer dollars? You sure about that?

[billeisele 130]

Subsidies come in many different forms. There's tax support for all kinds of things and some of it has been around for years. 

As for solar in SC there are two subsidies. There's the tax savings by investing in solar and the kWh subsidies. The State gives a tax break worth 25% of the solar system value. It's capped at $3,500 or 50% of the tax liability whichever is less.

The regulated utilities are required to provide heavy subsidies. They pay the solar owners the full retail rate for any generation sent to the grid. It's about 13 cents / kWh. One issue with that is the cost of generation is in the 2.5 - 4.5 cents range, depending on when the power is generated. That's what the utility actually saves. The solar owner receives a subsidy of 8.5 - 10.5 cents / kWh. The typical system generates excess energy when the cost of generation is in the low range. The subsidies, for ease of discussion, are about 10 cents / kWh.

In addition, the $9.50 basic facilities charge doesn't collect revenue to support the grid.  For a solar user that means that they pay little to nothing for the grid. Yet the grid is there and it's being maintained so that they will have power when the solar system output is less than the home requires. This is not uncommon across the US but it's being addressed in some jurisdictions.

The utility collect the funds to pay the subsidies from all rate payers. The 99% of non-solar users are subsidizing the 1%. There's a line item change on the bill to collect the funds for energy efficiency programs and solar payments. It's called Distributed Energy Resource charge. My estimate is that the local utility collects approximately $1.15 million a month. I have no clue what the ratio of the funds is for energy efficiency or solar.

Some of the Co-Ops in SC understood this issue and modified their rate structure. For residential customers they use a time-of-use rate with an energy charge of 5.2 cents, a peak hours (3 hours a day) demand charge of $12/kW, and raised the basic facility charge to $28.50 a month. What this does is: 1) provides a direct incentive that rewards behavior to shift the usage out of the peak period, 2) eliminates some or most of the subsidy for solar, and 3) allows a solar user to pay a "fair share" of the grid costs.

How does #3 happen. The higher basic facility charge collects money to support the grid as does the demand charge. It would be rare for the solar user to provide 100% of their needs during the peak hours. It only takes one day a month with clouds, rain, etc. to cause the solar user to draw all their power from the grid. That's when the demand charge collects the grid costs. If the electric water heater runs for 20 minutes it will cost $18 for the month. If 3 tons of HVAC runs for 30 minutes it will cost $20 for the month. The lights, TV,  and plug loads can easily add another $10 - $20. The demand charges add up quickly. If the solar user has a big battery system they might avoid those charges.

With this type rate structure the subsidies are minimal and the economics for solar provide no payback. 

[billvon 2,991]

6 hours ago, billeisele said:

Subsidies come in many different forms. There's tax support for all kinds of things and some of it has been around for years.

So in other words - you are 100% in favor of socialism as long as it pays for your agenda.

[jakee 1,489]

7 hours ago, billeisele said:

The regulated utilities are required to provide heavy subsidies. They pay the solar owners the full retail rate for any generation sent to the grid. It's about 13 cents / kWh. One issue with that is the cost of generation is in the 2.5 - 4.5 cents range, depending on when the power is generated. That's what the utility actually saves. The solar owner receives a subsidy of 8.5 - 10.5 cents / kWh. The typical system generates excess energy when the cost of generation is in the low range. The subsidies, for ease of discussion, are about 10 cents / kWh.

Disagree. It may only cost the utility company 3.5c to generate the power, but they sell it at a profit. Why should the solar owners have to give it away at cost? By that logic every bit of profit the ultilty company makes from the rate payers is a subsidy.

Your problem is that you're thinking of it as money being gifted by the utility companies, rather than as rate payers simply buying their electricity from solar owners instead. How much of it is actually a subsidy, and how much is competition?

[tkhayes 348]

21 hours ago, brenthutch said:

It is a wealth transfer to those who have solar panels paid for from folks who don’t. 
 

“Yet those who had signed up for the subsidies before that year will continue to receive their higher rates, while Californians without rooftop solar installations will have to pay higher electricity rates, effectively shouldering the subsidy burden.”

Yeah it is a wealth transfer just like car insurance or social security.... they take money from people that don't have car accidents and give it to people that DO have car accidents.  They take money from people that live shorter lives and give it to people that have longer lives...

You failed to address (yet again) the cost of $0.00018/Kwh..... a pittance... but yeah, it's a wealth tax.....

[JerryBaumchen 1,363]

12 hours ago, billvon said:

So in other words - you are 100% in favor of socialism as long as it pays for your agenda.

Hi Bill,

As always; it depends upon who's ox is getting gored.

Jerry Baumchen

 

[billeisele 130]

On 8/28/2024 at 2:08 AM, jakee said:

Disagree. It may only cost the utility company 3.5c to generate the power, but they sell it at a profit. Why should the solar owners have to give it away at cost? By that logic every bit of profit the ultilty company makes from the rate payers is a subsidy.

Your problem is that you're thinking of it as money being gifted by the utility companies, rather than as rate payers simply buying their electricity from solar owners instead. How much of it is actually a subsidy, and how much is competition?

Interesting perspective and grossly simplistic.  Yes the utility earns a profit on the delivery of service. That includes much more than generation. For the local utility, YE 2023 the actual margin was less than 4%. the authorized rate of return is 9.5%. 

The utilities in my area have an all-inclusive rate. It includes the cost of generation, step-up transformation, transmission, step-down transformation, distribution, another step-down transformation, metering, and 24-hour call service. If each component of the service were priced individually the customer would have clarity. 

The utility is forced to buy the excess solar generation at the full retail rate that's inclusive of that list of services. The only component that's being avoided is generation. That's not competition it's a subsidy.  OK fine, if the solar person should get a profit then set it appropriately. If the cost of generation is 3.5 cents and the solar peep earns the authorized rate of return then they would get 3.8 cents not the 13 cents that they are getting. 

Unfortunately for the 99% of non-solar owners the utility is not the one gifting the subsidy it's the customers. The utility collects the funds and redistributes them.
 

[billeisele 130]

On 8/28/2024 at 1:25 AM, billvon said:

So in other words - you are 100% in favor of socialism as long as it pays for your agenda.

Uhhhh ... NO. Disagree with your conclusion. I'm not a fan of subsidies. I realize they're out there and many things have them.  I distinctly remember that when the ethanol legislation was passed John McCain stated, "It would be the largest farm subsidy in history."

As stated, some subsidies have been around for years. No doubt they couldn't be instantly unraveled but I'd be in favor of moving in that direction. Kinda like shrinking the size of government. Strategic analysis with decisive reductions.

Granted, it's a huge list and would be almost impossible to untangle it.

[JerryBaumchen 1,363]

2 hours ago, billeisele said:

Interesting perspective and grossly simplistic.  Yes the utility earns a profit on the delivery of service. That includes much more than generation. For the local utility, YE 2023 the actual margin was less than 4%. the authorized rate of return is 9.5%. 

The utilities in my area have an all-inclusive rate. It includes the cost of generation, step-up transformation, transmission, step-down transformation, distribution, another step-down transformation, metering, and 24-hour call service. If each component of the service were priced individually the customer would have clarity. 

The utility is forced to buy the excess solar generation at the full retail rate that's inclusive of that list of services. The only component that's being avoided is generation. That's not competition it's a subsidy.  OK fine, if the solar person should get a profit then set it appropriately. If the cost of generation is 3.5 cents and the solar peep earns the authorized rate of return then they would get 3.8 cents not the 13 cents that they are getting. 

Unfortunately for the 99% of non-solar owners the utility is not the one gifting the subsidy it's the customers. The utility collects the funds and redistributes them.
 

Hi Bill,

Almost everyone in this country gets a subsidy of some type; some more than others.

It all comes down to:  Who's ox is getting gored?

Jerry Baumchen

[JerryBaumchen 1,363]

2 hours ago, billeisele said:

Uhhhh ... NO. Disagree with your conclusion. I'm not a fan of subsidies. I realize they're out there and many things have them.  I distinctly remember that when the ethanol legislation was passed John McCain stated, "It would be the largest farm subsidy in history."

As stated, some subsidies have been around for years. No doubt they couldn't be instantly unraveled but I'd be in favor of moving in that direction. Kinda like shrinking the size of government. Strategic analysis with decisive reductions.

Granted, it's a huge list and would be almost impossible to untangle it.

Hi Bill,

So, what have you done to get it moving in that direction?

Jerry Baumchen

[JoeWeber 2,720]

4 hours ago, JerryBaumchen said:

Hi Bill,

So, what have you done to get it moving in that direction?

Jerry Baumchen

Well, he posts here on the most read political blog on the planet outside of South Carolina. What more are you wanting?

[billvon 2,991]

On 8/27/2024 at 4:32 AM, tkhayes said:

your headline is false

Of course it is.  It's intended to anger, not inform.

Quote

California generates 47TW of solar power today, so the $8.5B in subsidies adds up to $0.00018 per KWH.

48GW total generation by now, which means 60 TWhr a year as of now.   That represents 30% of our total power generation.  And much of that solar funding actually goes to storage, so that we don't have blackouts when it gets hot.  Currently we are in a heatwave, and nary a blackout in sight.  And this was during a summer that had the hottest June and July on record - and August looks like it will be another hottest on record.

We used to import about 20% of our power; we are now down to 10%.  This year we had over 100 days where, for several hours, 100% of California's energy needs come from non-fossil-fuel sources - and that time is constantly growing.

As of today, more than half our electrical energy comes from non-fossil-fuel sources.

In other words - the subsidies worked.

[SkyDekker 1,465]

15 hours ago, billvon said:

We used to import about 20% of our power; we are now down to 10%.  This year we had over 100 days where, for several hours, 100% of California's energy needs come from non-fossil-fuel sources - and that time is constantly growing.

As of today, more than half our electrical energy comes from non-fossil-fuel sources.

Wow, what a horrible investment. Totally not what a government should be doing.

[billeisele 130]

On 8/29/2024 at 9:27 PM, JerryBaumchen said:

Hi Bill,

So, what have you done to get it moving in that direction?

Jerry Baumchen

Other than voting for folks that don't want to expand government or subsidies I'm not sure what any individual can do that would be effective. Sure we can write our elected folks but not sure that does anything. I have no comprehensive knowledge of what all the subsidies are or how they're tangled together. 

Did some reading. This is a quote from a Hoover Institue paper linked below, "Uncle Sam doled out nearly $100 billion in taxpayer subsidies. These welfare payments come in every conceivable shape and size: government grants, sweetheart business deals arranged by the Commerce Department, cut-rate insurance, low-interest loans, a protective wall against foreign competition, exclusive government contracts, and a mind-boggling maze of special interest loopholes in the tax code."

Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers | Hoover Institution Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers

Using this one item as an example, "In 1997 the Forest Service spent $140 million building roads in national forests, thus subsidizing the removal of timber from federal lands by multimillion-dollar timber companies. Over the past twenty years the Forest Service has built 340,000 miles of roads--more than eight times the length of the interstate highway system--primarily for the benefit of logging companies." One has to wonder what the impact would be on products made from wood if the lumber companies had to pay for the roads.

What gets cut, how much, which goes first, how does it impact the cost of finished products, etc.? There are plenty of questions to answered and it appears that there are few or no politicians willing to tackle it.

[JerryBaumchen 1,363]

30 minutes ago, billeisele said:

Other than voting for folks that don't want to expand government or subsidies I'm not sure what any individual can do that would be effective. Sure we can write our elected folks but not sure that does anything. I have no comprehensive knowledge of what all the subsidies are or how they're tangled together. 

Did some reading. This is a quote from a Hoover Institue paper linked below, "Uncle Sam doled out nearly $100 billion in taxpayer subsidies. These welfare payments come in every conceivable shape and size: government grants, sweetheart business deals arranged by the Commerce Department, cut-rate insurance, low-interest loans, a protective wall against foreign competition, exclusive government contracts, and a mind-boggling maze of special interest loopholes in the tax code."

Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers | Hoover Institution Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers

Using this one item as an example, "In 1997 the Forest Service spent $140 million building roads in national forests, thus subsidizing the removal of timber from federal lands by multimillion-dollar timber companies. Over the past twenty years the Forest Service has built 340,000 miles of roads--more than eight times the length of the interstate highway system--primarily for the benefit of logging companies." One has to wonder what the impact would be on products made from wood if the lumber companies had to pay for the roads.

What gets cut, how much, which goes first, how does it impact the cost of finished products, etc.? There are plenty of questions to answered and it appears that there are few or no politicians willing to tackle it.

Hi Bill,

I appreciate your taking the time to respond.  I know it is work for you.

Re:  Other than voting for folks that don't want to expand government or subsidies I'm not sure what any individual can do that would be effective. Sure we can write our elected folks but not sure that does anything.

I agree, somewhat.  Here in Oregon, we have a website for the state legislature that includes the email address of every member.

Lots of people poo-poo that emailing, writing, etc will make a difference.  While it might not make a LOT of difference, it does make SOME difference.  Plus, I feel better when I can tell any public official what I think.

Re:  These welfare payments come in every conceivable shape and size

Your Hoover Institute lost me right there.  ALL subsidies are a subjective thing.  As I keep saying:  It all depends upon whose ox is getting gored.

When you do your taxes, anything that you list that will reduce your tax burden is a subsidy.  And, that is a fact.

Re:  the Forest Service has built 340,000 miles of roads

I ran a project over in Montana about 35 yrs ago.  We had to 'rebuild' the Forest Service road to be able to access the site.  I question that this statement really means 340,000 miles of NEW roads.  Maintaining existing roads is a necessity.

Re:  There are plenty of questions to answered and it appears that there are few or no politicians willing to tackle it.

Oh, there are always LOTS of politicians willing to tackle it; you just disagree with them.

Be open-minded but, be skeptical.

Jerry Baumchen

[JoeWeber 2,720]

57 minutes ago, billeisele said:

Other than voting for folks that don't want to expand government or subsidies I'm not sure what any individual can do that would be effective. Sure we can write our elected folks but not sure that does anything. I have no comprehensive knowledge of what all the subsidies are or how they're tangled together. 

Did some reading. This is a quote from a Hoover Institue paper linked below, "Uncle Sam doled out nearly $100 billion in taxpayer subsidies. These welfare payments come in every conceivable shape and size: government grants, sweetheart business deals arranged by the Commerce Department, cut-rate insurance, low-interest loans, a protective wall against foreign competition, exclusive government contracts, and a mind-boggling maze of special interest loopholes in the tax code."

Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers | Hoover Institution Welfare for the Well-Off: How Business Subsidies Fleece Taxpayers

Using this one item as an example, "In 1997 the Forest Service spent $140 million building roads in national forests, thus subsidizing the removal of timber from federal lands by multimillion-dollar timber companies. Over the past twenty years the Forest Service has built 340,000 miles of roads--more than eight times the length of the interstate highway system--primarily for the benefit of logging companies." One has to wonder what the impact would be on products made from wood if the lumber companies had to pay for the roads.

What gets cut, how much, which goes first, how does it impact the cost of finished products, etc.? There are plenty of questions to answered and it appears that there are few or no politicians willing to tackle it.

Back when I was with the Bird and Bunny people we’d defeat timber sales(the loggers do pay something) by making the roads egregiously more expensive than normal. The Forest Service often paid more for the road than they got for the timber. A spotted owl feather here, an endangered sedge there, and next thing you know they’re tossing in the towel.