A Modest Proposal

In these early days of the nascent solar industry, there is much discussion of how policy can best support and encourage (aka: pay for) the nurturing of this promising technology to maturity.

Most homeownners today look at solar and struggle with the combination of newness and complex financial payback, delaying what would be an otherwise fruitful investment in home improvement.

There are three common approaches proposed to alleviate this dilemma:

• Regulation: Simply require all new homes to include solar in their power system.
• Subsidy: Arrange for Local, State and Federal governments to offer tax credits, rebates or guaranteed subsidized financing for solar installations.
• Indirect Subsidy: Install cost penalties on existing energy sources by adding carbon taxes to fossil fuels.

While all of the above proposals are attractive and popular, they are tainted with inefficiencies.
Regulation agencies can never comprehend the nuances of each specific case. Inevitably, solar installations will be forced in locations where they are not practical, and government money will be spent persuading installations in conditions where it is so favorable that it would have been done anyway. Subsidies and indirect subsidies are common and inevitable, but often lead to absurdities of inefficiency.

There is another option that has gone overlooked: deregulation.

Our energy policy over the last few decades has evolved to an extent that any new home is required by law to include conservation elements above what a home owner would install on their own. Elements such a low energy lighting, special heating and robust insulation add to the cost of a new home. If the cost of compliance for a home approaches $30,000, this is approximately the cost of a typical home solar system.

The rationale for these regulations is twofold: First, reducing energy consumption means less fossil fuel pollution. Second, reducing energy consumption reduces pressure to build enormously capital-intensive energy capacity allowing the installed capacity to remain sufficient over a longer period of time.

If a home is outfitted with solar however, both of the above aspirations are satisfied. By simply waiving conservation inspired building codes for homes equipped with solar, financing for the solar installation becomes available without government intervention.

Taking this thinking further leads to some interesting effects. A home that draws its power from clean solar should be liberated from conservation constraints across the board. Homeowner habits that have become reflexive to us in a conservation minded world are no longer necessary. Air conditioning can be turned up freely on hot summer days (when the solar array is at its most productive), rooms can be flooded with light, leisure giving electric power can be used generously in the smug knowledge that it is abundant and non-polluting.

Picture such a house: free flowing clean solar electricity heating, cooling and driving lifestyle appliances to the homeowners unbridled delight.

Now picture beside it today's energy conservation compliant home: nearly windowless, confined, lit sparingly by blue-green fluorescent bulbs -and for all its effort still with an enormous carbon footprint compared to our solar home.

They cost the same to build.
Which one will be worth more?

Perhaps the best way to encourage solar adoption is to simply get out of the way.