Connecting the Dots After a Trip to the Home Depot
A couple of Saturdays ago, I had to make a trip to my neighborhood Home Depot to pick up a few gardening supplies to do some work in the backyard.
While looking for a replacement hose for my drip watering system (see, I am water efficient despite my blog post decrying the installation of water meters in my neighborhood), I was approached by a nice man carrying an iPad. He identified himself as a salesman from Tesla.
Surprised, I asked, “are you now selling electric cars on the aisles of the Home Depot?”
He told me that Tesla had recently acquired Solar City, which sells and installs solar panels on people’s homes. And he then proceeded to try and sell me a solar panel for my home, which I politely declined.
While I had an enjoyable conversation with the salesman, I did get on my soapbox for a bit and relay some of what PRI’s Wayne Winegarden wrote about in his recent study “Costly Subsidies for the Rich”. Wayne’s study found that companies like Tesla benefit when government picks winners and losers and offers generous taxpayer subsidies for people to buy electric cars, trying to artificially stimulate demand when not much exists in the free market.
After my encounter with the Tesla solar salesman, I tried to connect the dots, wondering why the electric car-making giant would be branching out into solar panel installation.
Things have not been so hot for the solar industry as of late following a boom (and generous taxpayer subsidies) during the Obama era. A recent CNBC article noted the industry’s challenges, which include the Trump administration’s tariffs on importing solar panels, and analyst forecasts for solar installation being revised downward.
Recently, the state Energy Commission helped me connect the dots.
Picking winners and losers yet again, the Commission voted to require the installation of solar panels on nearly every new home built in the Golden State starting in 2020.
In this case, state government action primarily benefitted solar companies like Tesla, again when market demand was declining.
The day after the vote, TheStreet.com reported that – not surprisingly – solar company stocks were soaring following the Energy Commission vote. Tesla stock rose 1 percent the day following the vote.
The loser here will be Californians who are looking for relief from rising home prices. The Commission’s vote will actually make the problem worse. It was estimated that requiring solar could raise home construction prices anywhere between $10,000 and $30,000.
It’s just the latest reminder that when government puts its thumb on the scale and interferes with the free market, Californians are almost always the big loser.
Tim Anaya is communications director for the Pacific Research Institute.