Net Metering with Solar Panels: a Closer Look

The true economic and environmental costs of government-subsidized renewable energy programs.

For years, the state of Vermont has subsidized solar panels, especially through its vaunted net metering program, in which electricity customers pay increased electricity rates to support the installation of rooftop solar panel arrays. The panels collect energy from the sun to serve residences. Excess energy is fed back onto the electric grid system, and panel-owners are paid a fixed rate on account for the energy provided by their solar panels to the grid. In winter and when the sun is veiled, these homes draw the needed power in the customary grid fashion, which is credited toward the excess power produced in sunny times by their panels. This program is inequitable, inefficient, and wasteful.

(A solar panel system in Vermont’s net metering program.)

I have previously written in detail about how regressive (inequitable) this program is. The Vermont Department of Public Utilities has described it as regressive, and estimates that the program increases electric rates by $37 million annually in Vermont. That extra money comes from fee increases, levied upon retirees and low-income Vermonters, some of whom heat their homes with electric heaters. Money is siphoned away from those least able to pay, to help wealthier homeowners invest in a capital improvement so that they don’t have to pay an electric bill again. Similar policies now prevail in Vermont for heat pumps and EV cars, transferring wealth like a trickle battery, trickling up from the poor to the wealthy. Tenants in 40-year-old trailers pay higher energy costs so that newcomers to Vermont building mansions can subsidize their heat pumps and solar panels. “Progressives'' have accomplished this regressive practice while patting themselves on the back for how they are shielding poor people around the world from the adverse impacts of climate change. (An utterly unproven, and patently absurd, claim).

This boondoggle of thievery has been imposed on poor Vermonters by a cadre of climate alarmists who claim that these manufactured products will save the planet: they will not. Absent from climate impact calculations for heat pumps, solar panels and EVs are the extensive and dramatic environmental impacts incurred in their manufacture. Many solar panels manufactured in China are made using coal; EVs require extensive mining of rare minerals, and numerous chemical inputs; heat pumps may reduce carbon dioxide, but how much pollution is spewed into the ecosystem by their manufacture? This analysis does not require an assessment of the impossibility of the grid to serve this fantasy system (an additional failure): it is a matter of simply measuring true externalized costs accurately. And this is something that not a single Vermont Progressive legislator has undertaken, for if they did they would be exposed as charlatans, or worse, stupendously stupid.

Because this whole scheme, magic-spell sounding as it is, is stupendously, incomprehensibly, criminally stupid. Jim Jones caused less harm compelling his followers to drink cyanide-laced Kool-Aid than Vermont’s legislators have inflicted with their unilateral, unproven fantasies. But just like cyanide, poisonous policies will work their toxicity: in time everything I’m claiming here will be evident.

So Vermont’s net metering program to subsidize solar panels for homeowners is blatantly regressive and pollutes far more than any claimed environmental savings. But is is also wasteful, because human nature has a way of intruding its reality even into the wistful vain imaginings of frail minds.

The net metering program credits energy generated by solar panels onto customers' accounts, but the homeowners do not receive any cash: unused credits are mysteriously absorbed by the utility companies. Here is the moral hazard: a homeowner whose solar panels have created an energy account credit balance for winter has no incentive to shut off their lights–their energy in winter is “free.” Actually, the situation is far worse than that: the energy is not just free but “paid for” in the sense that the homeowner incurred costs to install the solar panels, and the credits were “earned” by those panels. The temptation is to leave the lights on in every room–-the energy is paid for, and if unused there is no benefit received by the homeowner and they “lose” that asset. There is no financial incentive to turn off or turn down the lights: indeed, there is a financial incentive to just leave them on!

Progressives likely will dismiss this common sense problem by claiming that human nature does not apply–that the virtue-signaling climate warriors with publicly-subsidized solar arrays will astutely monitor their energy and maintain their frugality even if it means leaving their energy credits unused. That, of course, is simply more fantasy.

Similar moral ecological hazards exist for heat pumps and EVs. Why not drive extra miles since the EV car is so clean? Driving around leaf peeping is cheaper in an EV–the energy has been subsidized once again by the poor–so why not drive around even more than if the tank needed gasoline for fuel? If heat pumps mean the heating bill shrinks to a paltry burden, why leave the temperature at 68 and wear a sweater when it costs close to net zero to leave it at a balmy 73? And these scandalous government programs compound their problems–a person with subsidized solar panels, heat pumps, and an EV has an incentive to burn up their electricity credit from their solar panels in either their car or their heat pumps. Burn, baby, burn!–let the poor people foot the tab for the waste, while the polluters delude themselves they are saving both the planet and the poor, and so they deserve a warmer home, an extended country drive, a long shower or a hot tub!  

Vermont’s net metering program purports to help the poor while saving the environment. What it does in fact is extract wealth from the poor and funnel it to more affluent citizens, with a “net” destruction to the ecosystem. Rooftop solar arrays are only half as efficient in energy production as commercial field arrays: Vermont is subsidizing less efficient residential installations, which may well carry more than twice the environmental impact of more efficient commercial systems. These programs all divert taxpayer money inequitably toward manufacturing industries that pollute, while encouraging beneficiaries to consume (waste) yet more energy in the false belief that they are not contributing to net pollution. 

This is an increasingly visible disgrace, for which Vermont Progressives bear no shame. Likely they will call me names rather than weigh the truth of the facts I here allege. But taxpayers will in time see all of these effects: indeed they already are, in high electric rates that disproportionately impact the poor. 

At some point this fraud must be exposed, and some accountability is in order. These fantastical programs are destroying Vermont’s economy, culture, people, and environment all in one fell swoop.