California is making rooftop solar panels compulsory on new homes from 2020. But some economists are sceptical

A solar panel being fitted on a San Francisco rooftop. Image: Getty.

More California rooftops will soon sport solar panels, partly due to a new state mandate requiring them for all new houses and low-rise residential buildings by 2020.

This rule immediately sparked lively debates. Even experts who generally advocate for solar energy expressed skepticism that it was actually a good idea.

As an environmental economist who studies the design of environmental policies, I believe that doing something about climate change is important, but I don’t consider this new solar mandate to be the best way to achieve that goal. I’m also concerned that it could exacerbate problems with California’s housing market.

More than two sides

You might expect the debate over this policy, which became official when the California Energy Commission unanimously voted in favor of it on May, to pit two well-defined camps against each other.

Environmentalists who prize fighting climate change might love it due to a presumption that increasing the share of power California derives from solar panels will reduce greenhouse gas emissions by cutting demand for natural gas and coal.

On the other hand, those who question whether the costs of addressing climate change are worth it might hate the solar mandate, since they either see no benefits or think the benefits aren’t worth the costs.

But there are more than two sides.


Environmental economics 101

Many renewable energy experts, including economists like me, want governments to do something to address climate change but question the mandate.

University of California, Berkeley economist Severin Borenstein summed up this take in his open letter to the California Energy Commission opposing the rule. University of California, Davis economist James Bushnell also opposes the mandate for similar reasons.

Above all, what we economists call “command-and-control policies” like this mandate – inflexible requirements that apply to everyone – often don’t make sense. For example, going solar is less economical in some cases. Even in sunny California, builders can construct housing in shady areas, and not all homeowners use enough electricity for the investment to pay off before they move away.

The mandate does have some exemptions tied to shade and available roof space, but there could property owners subjected to the requirement to own or lease solar panels who might consider it unreasonable.

We tend to think that “market-based policies” would work better. By relying on incentives instead of requirements, people get to decide for themselves what to do.

Good examples of these policies include a tax on pollution, like British Columbia’s carbon tax, or a cap-and-trade market, like the European Union’s Emissions Trading System. Instead of restricting the right to pollute, these approaches make people and businesses pay to pollute, either through taxation or by buying mandatory permits.

The flexibility of market-based policies can make meeting pollution reduction goals cost-effective. When people – or businesses – have to factor the costs of pollution into their decision-making, they have a financial incentive to pollute less and will find ways to do so. By reducing pollution as cheaply as possible, more money is left over to spend on other pressing needs like housing, health care and education.

This advantage is not merely theoretical. By many accounts, market-based policies have successfully worked according to theory, including the U.S. sulfur dioxide trading program and the EU’s carbon trading program.

California itself has a cap-and-trade market. I believe that expanding and improving it would cut carbon emissions more cost-effectively than the solar mandate would.

Many economists also fear that the mandate will worsen California’s housing unaffordability. This crisis has many causes, such as restrictive zoning regulations that curtail construction. But the solar-panel requirement, which could increase the cost of a new home by more than $10,000, probably won’t help, even though supporters of the policy argue that the solar panels will pay for themselves in terms of lower monthly electricity costs.

The solar mandate’s fans

The solar mandate’s defenders, including Goernor. Jerry Brown and Sierra Club leader Rachel Golden, make several arguments – two of which I find credible.

The first is what I’d call the “Panglossian” argument, after the character in “Candide,” Voltaire’s 18th-century classic satire. In what Voltaire would call “the best of all possible worlds,” taxing carbon would make perfect sense.

But this is a world riddled with political obstacles that make enacting almost any climate policy next to impossible. If a big American state can enact an imperfect law like this mandate that might do some good, then it should go for it.

The other argument I find reasonable is that by drumming up more demand, the solar mandate will expand the solar panel market – thereby driving solar costs down, perhaps more quickly than a carbon tax would. There’s some evidence supporting the theory that these mandates can spur innovation in renewable electricity technologies.

If the mandate works out, it might address two issues at once: shrinking California’s carbon footprint and bolstering technological progress in the solar industry.

To be sure, the cost of residential solar panels has plummeted in recent years, although generating solar energy through rooftop panels remains less cost-effective than power from utility-scale solar farms.

A practical policy

After mulling all the various arguments made by these different camps, I don’t think that whether California’s rooftop solar mandate is the perfect policy for the climate or the state’s homebuyers is the question.

The answer to that question is a resounding no – but that is beside the point because no policy is perfect. The key question is whether this policy – given its imperfections and given the difficulty in passing more cost-effective policies – is a winner overall. That question is harder to answer.

The ConversationUltimately, I believe the mandate will yield some environmental benefits, though they could be more cost-effectively achieved through other means.

Garth Heutel, Associate Professor of Economics, Georgia State University.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

British television once sounded like Britain. But then, the ITV mergers happened

The Granada Studios, Quay Street, Manchester. Image: Wikimedia Commons.

This summer, several ITV franchises celebrated half a century of continuous operation. There was a Yorkshire Television themed cake, and a flag bearing the company’s logo was flown over ITV’s Yorkshire base for a time. It was all very jolly – but while a few people beyond Britain’s small community of television historians and old telly nerds engaged with the idea, any excitement was brief.

The main reason for is not, as you might assume, that, in the era of streaming and so forth, ITV is no longer a dominant presence in many people’s cultural lives: even the quickest of glances at the relevant figures would tell you otherwise. No, it’s because the mere existence of ITV’s franchises is now passing out of common memory. They are the trademarks, literally rather than figuratively, of a version of ITV that today exists only nominally.

For most of its history, ITV operated on a federal model. ITV wasn’t a company, it was a concept: ‘Independent Television’, that is, television which was not the BBC.

It was also a network, rather than a channel – a network of multiple regional channels, each of which served a specific area of the UK. Each had their own name and onscreen identity; and each made programmes within their own region. They were ITV – but they were also Yorkshire, Granada, Grampian, Thames, and so on.

So when I was a child growing up the in Midlands in the ‘80s, no one at school ever said “ITV”: they said “Central”, because that’s what the channel called itself on air, or “Channel Three” because that’s where it was on the dial. To visit friends who lived in other regions was to go abroad – to visit strange lands where the third channel was called Anglia, and its logo was a bafflingly long film sequence of a model knight rotating on a record turntable, where all the newsreaders were different and where they didn’t show old horror films on Friday nights.

The ITV regions as of 1982, plus Ireland. Image: Wikimedia Commons.

Of course, there were programmes that were shown across the whole network. Any station, no matter in what part of the country, would be foolish not to transmit Coronation Street during the period where it could persuade nearly half the population to tune in. But even The Street wasn’t networked from the beginning: it started in six of the then eight ITV regions, and rolled out to the other two after a few months when it became clear the series was here to stay.

This was a common occurrence: The Avengers, one of the few ITV series to genuinely break America, began in an even more limited number of regions in the same year, with other areas scrambling to catch up when the programme became a hit.

The idea behind ITV’s structure was that the regions would compete with each other to put programmes on the network, opting in and out of others’ productions as worked best for them. ITV was, after all, an invention of a 1950s Conservative government that was developing a taste for the idea of ‘healthy competition’ even as it accepted the moral and practical case for a mixed economy. The system worked well for decades: in 1971, for example, the success of London Weekend Television’s Upstairs, Downstairs, creatively and commercially, and domestically and internationally, prompted other regions to invest in high end period dramas so as to not look like a poor relation.


Even away from prestige productions there was, inexplicable as it now seems, a genuine sense of local pride when a hit programme came from your region. That Bullseye was made on Broad Street in Birmingham was something that people knew. That 17.6m people watched the 1984 Xmas special, making it one of the ten most watched programmes of the year, made Bully a sort of local hero. In more concrete terms, Bullseye and other Birmingham based programmes provided jobs, and kept that part of the country visible from all others. This was true of all areas, and from all areas.

ITV franchises would often make programmes that were distinctive to, or set in, their region. Another of Central’s late eighties hits was Boon. It might have starred the cockney-sounding Michael Elphick, but it was filmed and set in Birmingham, just as Central’s predecessor ATV’s Public Eye had been at the end of the sixties. In Tales of the Unexpected, one of the poorest and smallest ITV regions, the aforementioned Anglia, made a bona fide international hit, largely filmed in transmission area, too. HTV produced a string of children’s series set in its south west catchment area, including some, such as The Georgian House, that examined the way the area had profited from the slave trade.

There was another element of ‘competition’ in the structure of ITV as originally conceived: the franchises were not for life. Every few years, a franchise round would come along, forcing the incumbent stations to bid to continue its own existence against other local offerings.

The process was no simple auction. Ministers were empowered to reject higher financial bids if they felt a lower bid offered other things that mattered: local employment or investment, programming plans that reflected the identity of the region they were bidding to serve, or simply higher quality programmes.

Yorkshire Television itself owes its existence to just such a franchise round: the one that followed a 1967 decision by regulator IBA that Granada, until then the holder of a pan-northern England licence, was insufficiently local to Yorkshire. For a decade, commissioning and production had been concentrated in Manchester, with little representation of, or benefit for, the other side of the Pennines. IBA’s decision was intended to correct this.

Yorkshire existed in practical terms for almost exactly 40 years. Its achievements included Rising Damp, the only truly great sitcom ever made for ITV.

But in 1997 it was, ironically, bought out by Granada, the company who had had to move aside in order for it to be created. What had changed? The law.

In 1990, another Conservative government, one even keener on competition and rather less convinced of the moral and practical case for a mixed economy, had changed the rules concerning ITV regions. There was still a ‘quality threshold’ of a sort – but there was less discretion for those awarding the franchises. Crucially, the rules had been liberalised, and the various ITV franchises that existed as of 1992 started buying out, merging with and swallowing one another until, in 2004, the last two merged to form ITV plc: a single company and a single channel.

The Yorkshire Television birthday cake. Image: ITV.

Yorkshire Television – or rather ITV Yorkshire as it was renamed in 2006 – is listed at Companies House as a dormant company, although it is still the nominal holder of the ITV licence for much of Northern England. Its distinctive onscreen identity, including the logo, visible on the cake above, disappeared early this century, replaced by generic ITV branding, sometimes with the word Yorkshire hidden underneath it, but often without it. Having once been created because Manchester was too far away, Yorkshire TV is now largely indistinguishable from that offered in London. (It is more by accident of history than anything else that ITV retains any non-London focus at all; one of the last two regions standing was Granada.)

The onscreen identities of the all the other franchises disappeared at roughly the same time. What remained of local production and commissioning followed. Regional variations now only really exist for news and advertising. TV is proud that is can offer advertisers a variety of levels of engagement, from micro regional to national: it just doesn’t bother doing so with programming or workforce any more.

Except for viewers in Scotland. Curiously, STV is an ITV franchise which, for reasons too complicated to go into here, doesn’t suffer from the restrictions/opportunities imposed by upon its English brethren in 1990. It also – like UTV in Northern Ireland, another complex, special case – Its own onscreen identity. Nationalism, as it so often does, is trumping regionalism – although it was not all that long ago that Scotland had multiple ITV regions, in recognising its own lack homogeneity and distinct regions, while respecting its status as a country.


As is often observed by anyone who has thought about it for more than four seconds, the UK is an almost hilariously over-centralised country, with its political, financial, administrative, artistic and political centres all in the same place. Regionalised television helped form a bulwark against the consequences of that centralisation. Regional commissioning and production guaranteed that the UK of ITV looked and sounded like the whole of the UK. The regions could talk about themselves, to themselves and others, via the medium of national television.

The idea of a federal UK crops up with increasing frequency these days; it is almost inconceivable that considerable constitutional tinkering will not be required after the good ship UK hits the iceberg that is Brexit, and that’s assuming that Northern Ireland and Scotland remain within that country at all. If the UK is to become a federation, and many think it will have to, then why shouldn’t its most popular and influential medium?

A new Broadcasting Act is needed. One that breaks up ITV plc and offers its constituent licences out to tender again; one that offers them only on the guarantee that certain conditions, to do with regional employment and production, regional commissioning and investment, are met.

Our current national conversation is undeniably toxic. Maybe increasing the variety of accents in that conversation will help.

Thanks to Dr David Rolinson at the University of Stirling and britishtelevisiondrama.org.uk.