Incentives need more time to warm up

We’ve been hearing a lot about solar energy lately. It’s a pleasant-sounding concept, one that gives us warm eco-fuzzies akin to the ones we’d get hearing about organic vegetables or an army of sixth-graders hosing down a beached whale. But though it’s growing in popularity, solar energy is not yet something we see implemented day to day.

The reality is that for a significant number of Los Angeles residents and businesses, installing solar paneling is only feasible through the provision of incentives, usually in the form of tax or electric bill rebates.

The driving concept behind incentives is that by encouraging people to spend more than they originally would on key goods and services, society as a whole will benefit. By investing in costly alternative technology rather than what is cheaper and conventional, these consumers are giving the economy — not just themselves — a leg up. Therefore, they deserve a tax break, refund, deduction — you get the idea.

With solar energy, for instance, such subsidies are often signed over to the company performing the installation, which means that they can collect the rebates on the consumer’s behalf, reducing his out-of-pocket expense from the get-go — thus, affordability.

On Nov. 12, the Los Angeles City Council did us all a favor in throwing the brakes on a motion that might cripple that affordability.

The Board of Commissioners of the Los Angeles Department of Water and Power voted earlier this month to slash regional solar incentives. The City Council responded by motioning for a new charter rule, appropriately titled “City Council Veto of Board Actions,” allowing it specifically to overturn rulings by fellow city boards — including the DWP — so that the issue can be further explored before drastic steps are taken.

In terms of playing up the advantages of red tape, this would be the LADWP equivalent of the 1935 filibuster in which Sen. Huey Long held up a provision for 15 and half hours by reciting a combination of Shakespeare and exotic seafood recipes. All the same, it was necessary.

The Board of Commissioners wasn’t about to slash incentives because there wasn’t enough demand. They were going to do it because there was too much. Solar energy programs in Los Angeles have actually been running out of funding because too many people now want in on them for the suppliers to keep up, and therein lies the rub.

Now that demand for incentives exceeds supply, does their success mean we no longer need them? Or does their success mean we need them more? Essentially, we now need to ascertain whether we have reached the level of critical mass at which people will invest in solar energy without them, or if the demand will vanish when the incentives do.

The City Council got it right, at least for now. Solar energy is at the forefront of political discussion more than ever in California, but it’s not in the mainstream — the L.A. smog belying our heavy dependence on petroleum is proof enough of that. And with an economy still fighting to ditch its post-recession training wheels, perceived luxuries such as alternative energy take a backseat to air conditioning and rent.

It’s hard to be optimistic about the number of working-class Angelenos who would prioritize such abstracts as solar paneling for less reason than they were given before, at a time when they have less money than they were earning before. If the incentives suffer, it’s likely demand would too.

It smacks of vague and unsatisfying politicking to say that if we just keep incentives around for “X” amount years, they’ll pay for themselves down the road. But in a big-picture sense, incentives are already benefiting the economy if we consider cost externalities.

Take gas, for example — a $3 per gallon pricetag covers the cost of extracting, refining and transporting but does not reflect the economic cost of the Gulf oil spill or any healthcare expenses associated with constant exposure to pollution. In short, what we don’t pay at the pump, we pay in other bills.

In this context, expenditures such as solar energy are infinitely more profitable than they appear on paper. But again, it’s hard to convince people that alternative energy is a necessary expense while California simultaneously boasts an unemployment rate more than 12 percent.

Solar energy as it stands now is, from a purely financial standpoint, far too costly to be worth the hassle. Without incentives, there’s not enough demand to justify the high cost of production, distribution and installation of such an obscure commodity.

But persist with the incentives for that “X” amount of years and more people will be persuaded to convert to solar, the increased demand will lead to cheaper mass production, a greater supply of solar energy will be harnessed and boom — a self-perpetuating, economical domino effect.

Smog free.

Kastalia Medrano is a sophomore majoring in print and digital journalism and the  editorial director for the Daily Trojan. Her column, “Green Piece,” runs Tuesdays.