It’s time we learn what green energy costs states and cities
In all the focus on federal green energy spending, what’s been overlooked is that states and cities are also neck-deep in renewable energy subsidies.
In Texas, which is hardly unusual here, Dallas has a green building program that expedites permits for more energy-efficient building projects. And Plano provides a Smart Energy Loan Program “to provide energy-efficiency loans to homeowners.”
But we apparently have no idea how much taxpayers and consumers, through higher energy bills, are spending to subsidize all of those green energy projects.
At the federal level, a 2012 paper from the Washington-based Brookings Institution estimates that federal spending on “clean energy technology,” which includes nuclear, could hit $150 billion from 2009 through 2014.
And more is coming if President Barack Obama has his way. His 2014 budget includes $2.8 billion for the Office for Energy Efficiency and Renewable Energy and $28.4 billion for the Department of Energy to be spent on various projects.
But there’s more, as state and local governments have created thousands of green and renewable energy programs.
The North Carolina Solar Center at North Carolina State University manages the Database for State Incentives for Renewables and Efficiency and has been tracking state and local initiatives since 1995. That database is funded in part by the Interstate Renewable Energy Council and the U.S. Department of Energy.
The listed options for funding renewable energy projects are numerous: corporate tax incentives; green building initiatives; loan programs; performance-based incentives; rebate programs; personal, property and sales tax incentives, plus others.
According to the database, there are 1,124 state, territorial and local financial incentive programs for renewable energy (all numbers exclude a small number of listed federal programs).
By far, the most common practice is rebates, 557. The second most frequent approach is loans, 201.
The programs do not seem to follow the usual red state-blue state patterns. While no one would be surprised that California is toward the top of the list for renewable rebate programs (56), Minnesota has the most (76). But red state Indiana has 34 and Texas 29, while blue state Vermont has only one and Connecticut four.
The North Carolina center also tracks similar categories for energy efficiency, some of which cover traditional energy sources like natural gas, but also things like home energy audits or refrigerator recycling. Some programs target individuals, others focus on business. And while many of these efficiency programs may not be directly related to green energy, they are still part of a taxpayer-funded effort to promote specific types of energy consumption or conservation.
The database identifies 1,442 state, territorial and local financial programs to encourage energy efficiency, including 1,137 rebate programs and 222 grant programs.
However, no one seems to know how much state and local governments spend on these programs. Complicating the cost estimate is the fact that while many are funded with tax dollars, others are funded by overcharging consumers (i.e., ratepayers) on their utility bills.
For example, California’s Legislative Analyst’s Office released a paper in December entitled “Energy Efficiency and Alternative Energy Programs,” which claims, “Over the past 10 to 15 years, the state has spent a combined total of roughly $15 billion on such efforts [energy efficiency and alternative energy], the vast majority of which has been funded by utility ratepayers.”
Ironically, while taxpayers and utility ratepayers are being hammered coming and going to subsidize alternative energy and efficiency programs, the most reliable and cost-effective energy sources, fossil fuels, are the brunt of both political scorn and proposed tax increases.
While some of the green energy programs may be well worth the money, it’s hard to know because most taxpayers have no idea how much they’re spending. State legislators should press for those answers. We may be surprised at how much we spend for how little we receive.
Merrill Matthews is a resident scholar at the Dallas-based Institute for Policy Innovation. Follow him on Twitter at @MerrillMatthews.