The Value of Solar Is Competition

By Debbie Dooley, Conservatives for Energy Freedom

Free markets and competition are at the root of who we are as Americans. We believe that consumers should not only have choice, but a fair opportunity to exercise that choice. Government should not stand in the way of this choice and should do all it can to create a level playing field. This should be the case with solar here in Arizona.

Next month, the Arizona Corporation Commission will be making a decision on the “value of solar.” The Commission will decide how it will determine the costs and benefits of rooftop solar. This may sound too technical for the average Arizonan – and it is quite technical. But what is really at stake and why you should pay attention is that whatever the Commission decides will determine whether Arizona embraces markets and competition for energy.

Historically, energy has been provided by government sanctioned monopolies, such as your utility company. The government and the monopoly utilities work together to determine the utility’s customers and the rates these customers will be charged. In exchange, the monopoly utilities invest in energy infrastructure, like power lines and the power plants used to generate energy. All of this is being done with a guaranteed profit for the utility.

This worked well for nearly 100 years, but never once operated like a free market and these monopoly utilities – because of the lack of competition – were never incentivized to innovate and incorporate new technology.

In recent years, this has all changed. Distributed solar technology has created competition. Now, homeowners can decide to have a solar company as their energy provider or reduce the bills they pay to the monopoly utility through ownership of solar panels.

The result is savings for customers and control of their energy bills — and a loss of revenue by the monopoly utilities. The monopoly utilities can no longer build new power lines and power plants at its will since the localized sources of power from solar are making them increasingly less necessary.

Unfortunately, faced with a loss of profits, the monopoly utilities are going to the government to guarantee their profits. They are trying to make sure you – the consumer – continue to pay higher bills and do not have the option to go solar.

This is wrong.

Fortunately, the Commission is taking a close look at the costs and benefits of solar and has the opportunity to keep competition alive in Arizona. The key questions that should drive this process are: (1) does solar promote competition; (2) does solar allow for energy independence; and (3) do all consumers benefit from distributed solar.

The clear answer to all three questions is yes. Competition is good. Solar enables customers to have a choice in how their power is provided. The monopoly structure may have made sense in the past, but we don’t need to prop up an outdated system.

Solar also allows for energy independence – something we all should strive for. By putting panels on your home, you – the consumer – have control over your energy. You produce the energy that powers your home and are taking a step towards moving us toward self-reliance when it comes to energy.

Lastly, all customers benefit from distributed solar. If my neighbors and I put solar on our roofs, we reduce the need for the monopoly utility to build a new power plant. This saves all customers since the building those plants is billed to all ratepayers. Solar also reduces prices for everyone since the monopoly utilities won’t need to use more expensive power plants during the hottest hours since solar homeowners are being self-sufficient and reducing usage of the traditional sources of power.

The old monopoly structure made sense at one time. It is no longer necessary and we can actually embrace competition. The Arizona Corporations Commission must value the choice and competition that solar creates.