Net Metering Means Minorities Are Getting the Short End of the Deal

Net Metering Means Minorities Are Getting the Short End of the Deal

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This article first appeared on VOXXI.

By Gus Portela

Hiring is on the uptick, but its slow pace is leaving many struggling Americans in a lurch. As we head into election season, the debate over how to create more jobs and help working class families who are struggling economically, especially minorities, is sure to only gain traction.

Research shows that since the beginning of the economic downturn, African Americans have lost half of their wealth due to the housing crisis and unemployment. In urban areas like New York City and the San Francisco Bay Area, the highest portion of foreclosed and under water mortgages are held by African Americans and Latinos – even though overall housing markets are improving.

So, at a time when minority groups are still reeling from the effects of the downturn, it’s upsetting that certain energy policies are increasing the cost of electricity for them. Specifically, policies like net metering that incentivize wealthy Americans to invest in rooftop solar power by allowing them to sell back the excess electricity they generate. Because of the high rate at which they’re compensated, rooftop solar customers avoid some of the set costs of maintaining the electric grid, which are then passed on to non-rooftop solar customers.

The problem is that the non-rooftop solar customers who have to bear the brunt of these additional costs are the minority groups that are economically disadvantaged. Your average African American or Latino family – even if they are fortunate enough to own a home – cannot afford an expensive rooftop solar system.

To make a bad situation worse, rooftop solar customers still rely on the grid for energy at night or during bad weather. Forcing non-solar customers to pay for maintaining the grid while solar customers still get to use it when needed is allowing solar customers to have their cake and eat it too. The less fortunate assisting the rich by paying for their use of the electricity grid? Hard to believe this is true, but it’s happening, and the timing could not be worse.

A recent study by the Institute for Electric Innovation underscores just how much the rich are making off of net metering – in the state of California, a person with a 4 kW rooftop solar photovoltaic (PV) project will receive more than $20,000 worth of subsidies from the policy. With other federal tax credits included, some rooftop solar installations receive $24,000 worth of subsidies, when the actual cost of the system is much less.

Not to mention – when someone signs up to lease rooftop solar panels from a solar leasing company, they’re signing away their right to receive any of the net metering benefits. So it’s actually the rooftop solar leasing companies that are benefitting from the handout. Talk about helping the rich get richer – the tech billionaires and moguls behind many of these companies are the last people who should be profiting off the tax money of minority and lower-income groups.

No one is denying that renewable energy is important and that it should be supported. But let’s do this the right way. Net metering needs to be changed so everyone pays for using the grid and no one is getting a free ride. Let’s find a way for everyone to win and benefit from technological advances like rooftop solar.

Gus Portela is the national political director for the College Republican National Committee and is a board member of Future Leaders in Policy (FLIP).

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