Energy: the New Inequality

An article in Transmission and Distribution magazine gives rise to thoughts about the lampfuture of energy and inequality. The article talks about “distributed energy generation”, that is, the creation of energy at hundreds of small sites rather than in a few large plants. (1) These might be solar panels on homes or schools, or thermal generators, windmills or other devices. How energy becomes truly green in the US is by thousands of these small sites supplementing and eventually replacing the huge power plants  on which we have traditionally relied. Homes and companies that generate electricity will sell what they don’t need to the electric grid for others to use.

This is the direction in which California is going now, with the rest of the US to follow in the future.  Overall, it’s a nice vision, but there are a couple of concerns with it:

  • Who can invest in distributed energy generation? It’s easier to say who is excluded: apartment dwellers and the poor. You’re not putting solar on a roof you don’t own. However, with cheap financing, this might be a way to return small family farms to profitability, if there are any left. Those who can invest will see real reductions in energy cost.
  • The people who can’t invest in distributed energy will be at the mercy of the major electric companies. At least for the time being, those companies are going to have a bias toward building traditional power plants and saddling their subscribers with the cost. So the people who can’t afford to invest in distributed energy will get hit with higher bills.

A few states — notably New Jersey — have been aggressive with programs that offer financial incentives to home owners to invest in solar energy generation. Others have set requirements that utilities buy electricity from small producers and pay market rates for what they buy. However, not every state in the US has done either.

The threat is basically a form of double taxation on lower income households. Not only will they not benefit from savings, they will see their costs increase.



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