The New York Times
article on electrical utilities lobbying against government support of solar powered electricity didn’t surprise me. It did disappoint me, though.
You would think that given what electrical utility
executives know about shortages of fossil fuels and global warming, instead of
trying to scuttle solar they would develop products and services for the solar
market. It doesn’t have to just be a central power plant using solar energy to
generate electricity and then sending it to homes and businesses along the grid.
The utilities could also lease solar panels to houses and provide all
maintenance, servicing, repair and insurance. There all kinds of ways the
utilities can continue to line the pockets of the executives and shareholders in
a solar and wind world.
Didn’t any of these guys go to business school? One of the first things that business students everywhere have to read is the classic Harvard Business Review article on the railroad industry. The thesis of the article is that the railroads declined because they forgot that they were really in the transportation business and they didn’t adapt to the changing conditions.
Did Microsoft or Apple roll up their tents when tablets and
portable devices became big? No, they
adapted. What did that typewriter and mainframe computer company IBM do when
personal computers came on the market?
Electrical industry spokespersons complain that government
assistance to people who convert to solar helps to shrink the market for their
way of delivering electricity to homes, and that they will eventually have to
raise prices. So what? The country has been paying too little for energy for
too long, which is why we waste so much. (Of course it’s an illusion to think
we have relatively low energy costs, because so much of what we pay for our
oversized military is to protect the oil supply chain.) The rising price of
fossil fuel generated electricity helps to make solar and wind more attractive.
Isn’t that the point of the government support of solar?
Keep in mind that for many years into the future there will
still be a market for electricity generated by fossil fuels.
For decades, government gave generous subsidies and tax
breaks to electrical utilities, and they still do in the form of the annual rate
approval systems and tax exempt bonds to back construction of new capacity.
It once made sense to provide government support for fossil
fuels. But those days are long gone. Now
we as a society have a pressing need for government investment into developing
and commercializing sources of electricity that depend on renewable resources.
Biofuels seem less possible since the ethanol fiasco in which more energy has
been consumed to convert corn to fuel than resulted from the conversion while
food prices skyrocketed. Our best options are solar and wind.
If utilities don’t invest in these alternatives, they will
end up like makers of buggy whips. But that’s their problem, not the
government’s or yours. Our problem is to secure a source of electricity in a world
of resource shortages and extreme warming caused by carbon emission.
