South Carolina Leads on Free Market Climate Fixes
South Carolina solar leaders and elected officials are in Washington this week, telling an interesting story for the rest of the nation. Congressional staffers, their bosses, policy wonks, and regular people should hear it.
Progressive politicians and their friends in the media continue a barrage of coverage about climate change. Polls have shown most Americans did not care about the issue or believe it to be a problem, but after sustained conversation the polling suggests people are starting to pay attention.
The problem is the proposals. One can accept or not accept that the climate is changing, but those who do need not embrace massive government expansion, social welfare, and exorbitant spending as the solution. The progressive disposition seems to be that the Industrial Revolution and capitalism have polluted the planet and only the government can fix it. While the people of Chernobyl might disagree with that prescription, in the United States many Republicans have simply sat on the sidelines, not even offering a response.
One exception is the Republican legislators and governor of South Carolina. What they have done should provide conservatives nationwide with path toward owning the policy high ground on climate. Their solution can be embraced by voters who believe climate change is a problem and by those who do not. They simply let the free market work.
In the Palmetto State, the legislature passed the Energy Freedom Act unanimously and Gov. Henry McMaster signed the bill. The legislation expands the market for rooftop solar energy production by abolishing a 2% net-metering cap, which served as an artificial ceiling on the ability to produce solar power. Now, solar customers can be compensated for the energy they produce and send back to the state’s power grid. That both cuts the need for fossil-fuel-generated power and also incentivizes homeowners adding solar panels to their roofs.
The legislation also establishes regulations for future solar energy to compete with utility companies. South Carolina currently has more than 18,000 operating solar systems and expects to add 22,000 over the next five years. In 2016, that number was just 1,160 installations.
To be sure, existing power companies maintain power grids, and solar power only works when the sun is shining, but that could change when battery technology improves. States do have to avoid the pitfalls seen in some European countries where traditional power companies were reimbursing so much for green energy produced by homeowners that they did not have the money to maintain their infrastructure. But South Carolina’s approach has thoughtfully dealt with that issue: In a key compromise, the bill also subjects solar to further public service commission oversight. This fixes the pitfall of utilities getting hosed, but also serves as a balance for rate payers because it is a two-way street.
The upshot is that traditional power companies that rely on fossil fuels do not have to be scared of the approach and ending artificial caps on solar energy production helps the free market thrive.
This is not a "green new deal" like the one progressives want. It does not impose a top-down approach where government demands change and imposes it through mandates, regulations, and increased costs to businesses and homeowners. This is not a government jobs program. This is letting the free market work by ending artificial caps imposed to protect monopolists and older power industries.
Change is coming. Change always comes. The question for conservatives and, frankly, power companies, is whether they want to see change come through Washington bureaucrats and politicians imposing it and driving up the cost of traditional energy production, or whether they want to let the free market solve the problem.
Apple Inc., one of the largest companies in the world, insists on the use of renewable energy and has a goal of operating with just renewable energy. It is leveraging its position in the free market for change without government mandates. Other companies are stepping up as well. States that are not willing to embrace solar power will see a loss of economic opportunity from some businesses.
South Carolina understood that and is now leading on the issue. More importantly, South Carolina is not creating a market through government subsidy. It is simply removing regulations and artificial caps that prevented a market from growing on its own. The results speak for themselves. South Carolina residents are now able to invest in their own power generation and help the state become a clean energy producer. America should pay attention.