Our guest blogger is Tom Thompson, Policy Director of the New York Solar Energy Society and CEO of Gridwerks Consulting Inc.
The New York Solar Industry Development and Jobs Act is being hotly debated in the State Senate, with the summer recess deadline just a few weeks away. The act would create a specific carve-out for solar power, to the tune of 5,000 megawatts of solar capacity by 2025. Analysis done as recently as 2010 suggests that the economic benefits of the bill would include 22,000 new jobs and an estimated $20 billion boost in economic output. With this landmark legislation, New York can finally catch up with nearby states that have already passed similar solar laws.
Yet major New York utility Consolidated Edison Inc., more popularly known as Con Ed, is arguing that the legislation is a bad deal for New Yorkers because it will drive up electricity rates. Con Ed has chosen to criticize the bill through its transmission and distribution subsidiary, whose revenues would not be affected by the bill. But the parent corporation would be affected. The bill would force Con Ed Development, the company’s electricity supplier arm, to purchase solar energy under 15-year contracts, which could cut into corporate profits.
Here’s the truth for New Yorkers: the solar bill will have a very small impact on electricity rates. A 2010 CrossBorder Energy analysis estimates that the cost will be about 39 cents on the average household monthly bill. Further, the bill includes a provision to cap any resulting utility rate increases to a modest 1.5 percent. If costs approach the cap, then the pace of solar development would slow. But close observers of the solar sector are quick to point out that this is unlikely. Why? Because over the past few years solar costs have been plummeting due to technology improvements. Maintenance costs are already close to zero.
Con Ed’s ostensible concern for New Yorkers is questionable since it is already raising electricity rates even without a solar mandate. Last year Con Edison increased its electricity rates to the tune of $420.2 million annually, even though average state electricity rates actually declined. Meanwhile, company profits last year increased 14 percent to $893 million. Con Ed’s opposition to the bill is also hard to square with its solar investments of nearly $200 million in New Jersey and Massachusetts.
In contrast to solar, the cost of fossil fuels is notoriously volatile and the long-term trend is upward. Furthermore, reliance on fossil fuels like coal and natural gas involve the risks associated with global warming, toxic pollution, and fracking contamination. When the cost of fossil fuels rises, states with lots of solar power will be better positioned to resist pressure to increase rates even higher. New York legislators and Governor Andrew Cuomo must not be fooled by the negative messaging of Con Ed. They should pass the New York Solar Jobs Act into law and allow the Empire State to finally stake its claim to the fastest growing energy source in the world.