A Constitutional Right To Solar Power?

Solar Panels

Only the most ardent libertarians, those opposed to practically all zoning regulations, would argue that I ought to have a constitutional right to put a big diesel-powered generator in my backyard, either for my own nonemergency use or to sell power to my neighbors.

Most people do not want to live next door to power plants. As for me, the lot on which my Florida vacation home sits is barely bigger than a postage stamp, so the idea is a nonstarter anyway.

But what if I wanted to put a big solar array on my home’s roof to take advantage of the Sunshine State’s sunshine? What if I chose a setup that could generate so much power that I’d have plenty to spare on sunny days, either for my neighbors or to sell back to the local power grid?

Whether that sounds like a good idea depends on your point of view and on a variety of specific circumstances, but it is not the sort of thing that belongs in a federal or state constitution. These documents are best used to set down basic and enduring principles, not the public policy priorities of the moment. For the latter, we have legislatures, executives and administrative agencies, not to mention regular elections.

Sometimes people want to enshrine their policy preferences in constitutional documents as a way to attempt to stave off future change. This is exactly what Florida utility companies are trying to do with an amendment I plan to vote against this year.

The ballot initiative has already stirred controversy, with its opponents arguing that it is misleading and confusing for voters. The Florida Supreme Court ruled 4-3 that the initiative met the necessary requirements to appear on the November ballot. The proposed amendment, which would need 60 percent approval to pass, is framed in terms of establishing the right for consumers to own solar equipment – a privilege Floridians already have.

So in the short term, this amendment will change nothing at all, regardless of whether it passes. Either way, I am free to install solar panels on my roof and to sell the excess back to the utility on the terms provided by state regulators. I am not free to put myself in the power business and sell the excess power directly to my neighbors. For now, this is a monopoly granted to utilities by state law. The utilities want to keep it that way.

The ballot initiative arose in response to an earlier proposal. That measure would not only establish the ability to install solar as a constitutional right; it would also break the utility monopoly by allowing individuals to sell power directly to others, like their neighbors or their tenants. That competing amendment failed to secure a place on this year’s ballot, but its backers hope to get it in front of Florida voters in 2018.

If and when this competing initiative comes to a vote, I plan to oppose it too, for the same reasons. It is not about whether breaking up the utility monopoly is a good idea. Short-term policy preferences simply do not belong in a constitution.

Florida’s utility companies are not so much afraid of competition from individuals selling power to their neighbors. What really scares them is being stuck with enormous stranded costs by a changing energy mixture. Florida Power and Light currently uses mainly natural gas and nuclear sources to generate electricity. As of mid-2013, solar accounted for only 0.06 percent of FPL’s power, though the company has plans to build more solar energy centers. Even with an increased solar supplement, power plants in Florida will rely on natural gas and nuclear power for the foreseeable future.

The power plants on which most of us rely, and which even home solar users call upon on overcast or short winter days, are very expensive to build and maintain. The fewer customers who pay the utility company for power, the higher the rates the utility must charge – higher rates which, in turn, drive even more customers away.

On top of that, the electricity grid itself is expensive to keep up, particularly in Florida, where everything must be hurricane-resistant. If too many people come to rely on their neighbors’ solar installations and their own backup generators, Florida utilities could be stuck with excess capacity in both their grids and their plants. Someday in the not-too-distant future, improved battery storage is apt to make it more feasible for some homeowners to go off the grid entirely.

That last point, more than anything else, has motivated the utilities to try to lock their distribution monopoly in place via the state constitution. The amendment’s backers want to stop the clock by preserving the status quo in a way that will be difficult to change as conditions evolve.

It is true that the changing nature of energy will create economic forces that will be tricky to direct. That process will not be improved in any way by fossilizing 2016 conditions in a constitution that may not change on this point for decades to come.

Do I have a right to produce, or sell, solar power? It depends. Just like the right to generate any other kind of power, the conditions under which I ask the question make a difference. It is not a fundamental principle I want to carve into my state’s founding document.

About Larry M. Elkin 549 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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