Legislation for the “sunshine tax” on producers of solar energy is being moved through the Iowa House and Senate.
House File 669 and Senate File 583 both impose “private generation rates” on anyone that produces solar power with the intent ”to require customers who utilize private generation to pay their share of costs of electric utility infrastructure, thereby eliminating cross-subsidization.”
Solar is at the forefront of the renewable energy market with many questioning how it works and who bears the costs.
“There’s reasons to do solar; there surely are,” said Arne Hallam, professor of economics and associate dean for finance and operations. “Five years ago, the advantages of fossil fuels over solar and wind would have been much, much bigger.”
The main issue Hallam said he sees with solar is storing excess amounts.
“You either gotta shut it down, or you have to get rid of the electricity somewhere,” Hallam said.
So, Grid operators will pay consumers to burn unwanted energy.
“It’s cheaper for them to basically give you the electricity then take the day to shut it down,” Hallam said. “Wind, you can turn it off, but solars another problem. The solar panel is working unless you disconnect it.”
Proponents of the bill say it helps the producers to bear the cost of not using the grid.
“That’s why there’s this bill in the legislature, and they’re all around the country,” Hallam said. “This makes some economic sense.”
Hallam additionally discussed how Iowa State receives its energy.
“[At] Iowa State, sometimes they run on coal, sometimes they run on natural gas sometimes they run on wind,” said Hallam. “They literally watch what the prices are and if its cheaper for them to buy right now from one of the other companies then it is to run the coal-fired power plant that’s what they do.”
However, coal and its counterparts also inflict more damage upon the environment than solar.
“The firm who’s producing the electricity, and the consumer who’s getting the electricity, neither of them have to pay the people who’re suffering the damage from the pollution that’s going in the air,” Hallam said. “They don’t have to pay for the damage and pollution they’re doing”
House File 669, introduced March 3rd, and Senate File 583, introduced March 11th, will potentially see changes as they move through the Iowa Legislature.