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It’s Time to Modernize the Workforce While Protecting Independent Workers

December 1, 2020 by Leave a Comment

By: Nathan Brown

Throughout the past 10 years, the different ways in which Americans work have fundamentally changed. Thanks to technology, there are more innovative and flexible job opportunities for people to pursue outside of a traditional nine-to-five office job. 

A prime example of this transformation in how we work can be seen by the millions of people who operate in the on-demand economy, like those who choose to work in online or app-based platforms. Today, over 57 million Americans, including me, work on their own schedule, and that number will surely increase as more people realize the benefits that come with working in this sector – especially the flexibility it offers.

As a driver for Amazon myself, I value the flexibility that my work gives me. For many drivers like me, working independently allows us to balance our personal and professional life, particularly during these unprecedented times where many have to juggle multiple things like work, childcare, and virtual schooling. 

This is precisely why lawmakers, like Arizona’s U.S. Senators Kyrsten Sinema and Mark Kelly, as well as my Congressman Greg Stanton, must work to address the needs of this growing sector of the workforce. It is long overdue for policymakers to recognize that today’s labor laws and social safety nets are outdated. 

First and foremost, implementing a portable benefits program would be one meaningful way to address this issue. Establishing a portable benefits program will protect millions of independent workers and give them peace of mind in addition to expanding opportunities for people across all demographics, ethnicities, and backgrounds. In the long run, this would help brick and mortar small businesses, restaurants, and retail establishments compete in what has become an increasingly online economy that shows no sign of slowing down.

Independent workers in this space would also benefit tremendously from a portable benefits program. Having access to key items like health insurance, paid family and medical leave, and disability insurance that they can take with them no matter where they work would be a huge improvement that could attract even more people to work in this industry. 

Remaining independent while receiving these types of benefits is an overwhelming popular opinion among current workers as well, according to one poll, by a 4-to-1 margin. Given this large majority, it’s no surprise that recently in California, Proposition 22 passed with over 58% support. This proves even further that allowing independent contractors to stay independent while receiving benefits is wildly popular and is not a partisan issue – it is a pro-worker issue.

The reason that Proposition 22 was so effective and successful can be summed up simply: workers – and those who support workers – in California wanted these crucial independent contractors and app-based earners to be able to keep their flexibility and independence. This is great news for Californians, and now it’s time to focus attention and effort on this issue nationally.

Utilizing the success of Proposition 22 and federalizing the issue would be a huge step forward for workers across the country. Private companies are doing their part to elevate worker standards, and policymakers in Washington must match that enthusiasm.

Nathan Brown is gig economy worker and voter in Congressional District 9

Filed Under: Regulations, State Economy, State Government, Technology Tagged With:

A Simple Solution to Help Millions of Independent Workers Like Me

November 25, 2020 by Leave a Comment

By Eli Hirsche

For a lot of people, app-based platforms are a convenient way to get around town, order takeout, or skip the line at the grocery store. But for the drivers, couriers, and shoppers that make it possible, working in the on-demand economy means so much more. 

For some, it’s a way to earn extra income and make ends meet; for others, it’s a livelihood. Independent workers are a growing piece of our changing economy, yet unfortunately, outdated laws are holding many workers back.

This issue is personal to me, because I’m a gig worker myself. Like so many people, the COVID-19 economic shutdowns put me in a tough spot, so I started delivering for Doordash as a way to get through it and make ends meet.

What started as a last ditch effort to stay afloat quickly became my new passion. I love that I don’t have to sit at a desk and stare at wallpaper for 40 hours a week; instead, I can explore my hometown, help feed my community, and make a living on my own schedule.

I’m not alone. In America today, 57 million people – about a third of the workforce – choose independent work. According to one survey, 86% of app-based drivers cited flexibility as a top reason for driving.

Though independent work is a significant part of the workforce of today and the future, the laws that determine how workers get important benefits, like healthcare and retirement, are relics of the past.

That’s because our social safety net reinforces the employer-provided benefits system. For instance, about half of all Americans get their healthcare from their full time employer. However, gig workers who are legally considered self-employed often can’t personally afford the exorbitant costs of benefits. 

Steps like the Affordable Care Act have helped fill in the gap, but a lot of independent workers still don’t have access to all the important benefits they need to earn a stable living because policymakers haven’t kept up with the rapidly changing economy

A portable benefits system will help.

A portable benefits system would allow independent contractors to have access to the same benefits as full time workers without having to give up their flexibility. That’s because the benefit plan would stay with the worker even if they changed tasks or shifted work to another platform – hence “portable.”

The way it works is simple: the worker would pay a certain amount into the program, and whichever platform they earn on would also pay into it. For instance, if I were to use a portable benefits plan in my current situation, Doordash would pay into it; if I switched over to Uber Eats, they would pay into the exact same plan as well.  

Some states have already implemented smaller-scale versions of portable benefits. In January, Washington State launched a portable benefits program for medical and family leave, giving countless independent workers the ability to take care of their health and spend important time with their newborn children.

Independent work is here to stay, and our policymakers must update our laws to adapt. We need to create a portable benefits system that covers major benefits for all workers who need them. That way, independent workers like me won’t have to choose between jobs and a flexible schedule we love and the lifesaving benefits we need.

Eli Hirsche is a worker in the gig-economy and Mesa voter

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Filed Under: Regulations, State Economy, Technology Tagged With:

WSJ and Bloomberg highlight weaknesses in DOJ case against Google

October 21, 2020 by Leave a Comment

October 20, 2020

Wall Street Journal Google in the Antitrust Dock: Justice Will Need More Proof of Consumer Harm to Win its Lawsuit

Bloomberg Government Google Lawsuit Is A Case Of Antitrust Policy Run Amok: Editorial

The Editorial Boards of two of the largest publications in the country released articles highlighting their concerns with the Justice Department’s recently filed litigation against Google. The litigation is seen as the first in a series of lawsuits against big tech companies.

The lawsuit against Google is an antitrust suit and its culpability hinges on whether the company employs anticompetitive practices that harm consumers. Specifically, the lawsuit claims Google uses exclusionary practices similar to those the Government used to prove violations by Microsoft in the D.C. Circuit Court of Appeals ruling in U.S. v. Microsoft (2001), which held that Microsoft’s practice of bundling their web server and browser was monopolistic. And, that the agreements Google made with phone makers and wireless carriers to promote its search business were problematic.

Bloomberg said in its article that, “All the relevant agreements were the result of competitive bidding, users face only the slightest of hurdles if they wish to switch to other services, and even the world’s most ardent Bing enthusiasts must admit that Google has made a great product with immense consumer benefits.“

While the Wall Street Journal Editorial Board cited facts showing that consumers can easily switch between search engines as a major difference that could lead the courts to a different decision in this case: “But consumers can easily download other browsers and search engines if they don’t like Google’s, unlike in the 1990s when they had to buy special software or jump through hoops to use an alternative to Microsoft’s. Now most general search engines and web browsers are free. Microsoft’s Bing even pays consumers rewards for using it. Where is the consumer harm?”

The WSJ Editorial Board also laid out the complaint’s other weaknesses.

  • “In 2005 Google accounted for about 35% of the general search market compared to 30% for Yahoo and 15% for Microsoft. Both of the latter had plenty of data and capital to invest in building better search products. Microsoft pre-loads every Windows PC with its Edge browser and Bing search. Amazon’s Fire operating system uses Bing as its default. Google doesn’t stop users from switching to other search engines.“
  • “[C]onsumers consent to letting all sorts of companies, including supermarkets, collect data in return for a free service. Google also allows users to limit the data it collects. Most don’t.“
  • “Google uses its general search function to hook people, but it makes money from selling ads on specialized queries. This broader advertising market includes Amazon, eBay, as well as websites like Yelp, OpenTable and Expedia. About 60% of Americans start product searches on Amazon.“
Filed Under: Federal Government, Government Reform, Regulations, Small Business, Technology

Congress: Let Big Tech Help Small Business

October 8, 2020 by Leave a Comment

Written by: Jake Ward

Amidst the worst economic crisis since the Great Depression — when leaders should be boosting our economy and helping small businesses — a congressional subcommittee chair is instead playing politics and small businesses will pay the price.

In an extraordinary rebuke of American innovators and our global technology leadership, Rhode Island Rep. David Cicilline (D) just released a report on “Big Tech” that recommends Congress punish success by forcibly dismantling America’s leading technology companies. More importantly, he ignores the invaluable partnership between those tech leaders and millions of American small businesses.

Research and common sense tell us that smart use of digital tools and online marketplaces drives small business success. In the best of times, businesses that use affordable, scalable small business tools grow faster and have higher revenue and profits. In a pandemic, access to these tools may be the difference between staying in or bankruptcy.

According to Digitally Driven, a survey of more than 7,000 small businesses, tools that enable e-commerce, digital marketing, more efficient operations and working from home give American small businesses a fighting chance during the COVID recession.

They form a Digital Safety Net, as businesses that embrace them anticipate four times better revenue than those that don’t. Additional research documents that online marketplaces provided more than $145 billion in value in 2018 and likely twice that during the COVID pandemic.

By rejecting the data, Cicilline’s report is wrong from its thesis to the conclusion. Government concerns of tech-industry monopolies and market dominance are always built on quicksand.

Remember Yahoo, AOL and MySpace? Zoom was virtually unknown in February but now is synonymous with video conferencing as Kleenex is with tissues. To assert that there is no competition in technology is to ignore recent history.

At the heart of Cicilline’s recommendations is a “single-line of business rule” for digital platforms and marketplaces. This “Glass-Steagall for the Internet” proposal may be clever branding, but really it is a bad analogy built on faulty mythology twisted into bad public policy.

The legend was that banks’ bad investments using consumer deposits caused the Great Depression, and the Glass-Steagall Act of 1933 was intended to prevent banks from gambling with consumer deposits again. But today’s digital economy is not causing a Depression or the COVID recession. Digital platforms are delivering billions of dollars of value to consumers and small businesses and justifiably have been embraced as a result.

Another absurd proposal would ban digital marketplaces from showing any preference for their own products. But grocery and department stores have been selling their own brands alongside third-party products for decades. Will Congress also require store-brand cereal to be on supermarkets’ top shelves so consumers are less likely to find it?

The Cicilline proposal is a square peg in the modern economy’s round hole, and the resulting chaos will create inefficiencies and force higher prices for online ads, marketplaces, business collaboration tools, and many more services that today work brilliantly for millions of small businesses.

Despite the obvious evidence of tech industry competition and value, including digital platforms’ fierce competition for small business advertising, marketing, and software dollars, Rep. Cicilline is not convinced.

Or perhaps he is simply too busy headlining fundraisers as a modern-day trust-buster to pay attention to the substantive details and data. Is it any wonder that he is releasing the report while the media is occupied with the pandemic, Supreme Court and election?

Regulations are not inherently bad, and antitrust law is essential to protecting consumers. But the wrong regulations for the wrong reasons at the wrong time will have unintended consequences.

Forcibly breaking apart digital platforms will eliminate the gains that many small businesses have enjoyed for nearly a decade. The competition debate cannot just be about the “big” in Big Tech, as these platforms’ size and scale are precisely what enables them to provide small businesses with high-quality tools and services at affordable prices.

The debate about Big Tech must include Main Street and the millions of small businesses that are the backbone of our economy and will drive our economic recovery.

Filed Under: Arizona Politics, Congress, Technology

Connected Commerce Council Releases New Report: Arizona’s Digitally Savvy Small Businesses Outperform During Pandemic

September 10, 2020 by Leave a Comment

Washington, D.C. (September 08, 2020): The Connected Commerce Council (3C) today released a report detailing how small businesses nationwide that embraced digital tools early are generating more revenue than their peers, and that Arizona small businesses are using digital tools more and expecting 2020 revenue that exceeds the national averages. The report highlights the existence and importance of the small business “Digital Safety Net,” which 3C defines as the free and low-cost small business services that include communications and workflow tools, digital marketing and advertising, websites and social media, back-office tools, and e-commerce and online payment tools.

Digitally Driven shows that nationally small businesses that embraced digital tools the earliest – “Digital Drivers” – expect 4x better revenue for 2020 compared to “Digital Maintainers,” those who are generally skeptical of digital tools’ value and typically use only a few basic tools such as email and perhaps a website. In Arizona, 49% of small businesses are digital drivers compared to 35% nationally with a predicted 9.75% in revenue reduction compared to an expected 16% reduction in revenue nationally.

“In times like these, when in-person commerce is limited, if not impossible, and working from home is the norm, digital tools literally are a safety net preventing deeper small business calamity,” said 3C President Jake Ward. “The Digital Safety Net is real. However, the net could — and must — be bigger, more robust, and more inclusive. Small businesses must invest time in selecting the right digital tools for their business; technology companies must help small businesses access the right tools; and policymakers must invest more money in public-private partnerships that create and support small business resource networks.”

Other key findings in the report include:

In addition to the 49% that were digital drivers:

  • 23% of Arizona small businesses are “Digital Adopters.” They recognize the value of digital tools and are using some, but are not fully committed to digital, compared to 33% nationally
  •  24% of Arizona small businesses are “Digital Maintainers.” They are generally skeptical of digital tools’ value or are tech-nervous, and typically only use a few basic tools such as email and perhaps a website, compared to 33% nationally

Comparing the 50 states, those with a higher incidence of Digital Drivers show stronger small businesses resiliency than those states with more Adopters and Maintainers.

  • The states with the most Drivers and best-expected 2020 revenue are:

Nevada (63% Drivers, 5.26% revenue growth)

Alabama (51% Drivers, 6.61% revenue reduction)

Arizona (49% Drivers, 9.75% revenue reduction)

Georgia (40% Drivers, 10.75% revenue reduction)

Colorado (47% Drivers, 12.45% revenue reduction)

  • 71% of Arizona small businesses increased their use of digital tools during the pandemic, compared to 72% nationally.
  • Pre-COVID-19, 69% of Arizona small businesses found digital tools either “essential” or “important” to their business, compared to 68% nationally.
  • Arizona small businesses cited three key challenges to adopting and expanding their use of digital tools: 37% cite being unsure about return on investment, 52% cite cost, and 56% cite information and skills gaps.

“When COVID-19 hit, I was seriously concerned about the future of my business,” said Eli Crane of Bottle Breacher in Tucson, Ariz. “Luckily, we were already familiar with a number of digital tools that proved critically important during the crisis. These tools were definitely instrumental to our survival.”

The report also recommends that small businesses maximize their digital tool use and become better prepared for the next crisis, and provides a playbook for tech platforms, governments, and NGOs to support small businesses today and into the future.

For small businesses, it is critical to identify their goals, gaps, and precise needs to ensure they are investing in the right digital tools – not the most popular or least expensive options. For technology companies, helping small businesses discover which digital tools they need and
providing confidence-building skills training and user-friendly support materials will help with the knowledge gap that prevents many companies from taking the digital plunge. And for policymakers, the need is to increase funding of small business resources and create public-private partnerships to address access and education barriers that small businesses experience during tough economic times.

Digitally Driven, commissioned by 3C in conjunction with Google and Greenberg, is based on findings from a nationwide survey of 7,021 small businesses that were still in business, including a representative sample from every state in the country. Data are weighted by gender, ethnicity, region, business size, and vertical, to ensure an accurate national representation. The survey was fielded online and by phone between May 28 and July 3, 2020.

The full report can be found here.
A summary of the report and its key findings for Arizona can be found here.

About 3C: The Connected Commerce Council is a non-profit membership organization with a single goal: to promote small businesses’ access to essential digital technologies and tools. 3C provides small businesses with access to the market’s most effective digital tools available, provides coaching to optimize growth and efficiency, and cultivates a policy environment that considers and respects the interests of today’s small businesses.

Filed Under: Arizona Politics, Congress, Technology

Tech Policy and the 2020 Election: Antitrust and Big Tech

August 27, 2020 by Leave a Comment

By: Jennifer Huddleston

Introduction

Is Big Tech too big, and do companies such as Facebook, Apple, Google, and Amazon need to be broken up via antitrust action? Have we moved into a new age of “cyber barons”? Criticism of large tech platforms and discussions of antitrust action have come from both the left and the right recently. Many of these criticisms do not reflect the underlying principles of antitrust law, but instead reflect other policy concerns such as data privacy and content moderation. Given the criticism from both sides of the aisle, it is not surprising that both presidential candidates have suggested that they would engage in further antitrust scrutiny of large tech platforms if elected.

Liberal Criticisms Regarding Existing Standards

Democratic criticisms of current antitrust largely suggest that enforcement is not aggressive enough and does not account for practices that harm workers and stifle competitors but are not seen in economic harm to consumers. For example, the Biden-Harris platform supports modifying antitrust laws and ties the need for such modifications to “empowering workers.” More generally, criticisms from the left argue that the current approach to antitrust law does not properly account for all the harms to a market by large firms’ behavior and that a more flexible, policy-based approach should be used for more zealous antitrust enforcement.

There are two main problems with such criticisms. First, a more flexible and broad policy-based approach to antitrust would create greater uncertainty for consumers, innovators, and competitors. The prior rule of reason approach stifled beneficial mergers or changes out of an unjustified concern. This approach also tends to focus on the impact on competitors rather than on consumers’ welfare and a properly functioning market.

Second, even the supposed problems have not been shown to be truly harmful or even actually exist. Arguments about the use of data for house brands by Amazon is not that different from the behavior traditional retailers such as Target or Walmart have engaged in for decades. The idea of a “kill zone” (where big tech companies buy out small companies before they can challenge them) appears to be largely a myth and instead has provided more options for startups and investors as well as improved products for consumers. Concerns about market concentration often miss changes in market dynamics or differences in competition at a local versus national level.

Moving away from an objective standard of antitrust might not benefit the very consumers competition law was intended to protect and risks providing a dangerous way for political motives to intrude into an already competitive market. Such politicization could increase the abuse of antitrust law such as the Trump Administration Department of Justice’s alleged use of antitrust to review mergers in the cannabis industry based only on its dislike of the product.

Conservative Critiques of Antitrust

Calls to break up Big Tech have not only come from the left but also from policymakers on the right. Conservative criticisms often allege that the companies are abusing market power to silence conservative voices and argue that breaking these companies up would solve a litany of non-competition related policy concerns. The Department of Justice during the Trump Administration has been actively pursuing potential antitrust claims against the largest tech companies. The president himself has suggested more use of antitrust law against large tech companies, even applauding European Union fines against American tech companies. But as with the criticisms from the left, these proposed solutions might make the alleged problems even worse.

Breaking up “Big Tech” would not solve concerns about anti-conservative bias, content moderation, data privacy, or any of a litany of non-competition policy concerns. Such a policy motivation is not the appropriate use of antitrust and would be better addressed by more targeted policy reforms if needed. In fact, using antitrust to require a breakup might even make these problems worse. Smaller firms would have more limited resources to devote to tasks such as content moderation or data security and might find themselves engaging in more advertising or data usage without the efficiency of a large company. The result is far from a guarantee that these now separated companies would better respond to these policy concerns or be more friendly to conservatives. As former Senator Rick Santorum recently wrote, “Going back to the media of 25 years ago would not go well for the President or for conservatives…. As America wrestles with so many tough issues and prepares to select its leaders in a charged partisan atmosphere, social media matters. And social media matters more to the election prospects for conservatives than it does for progressives.”

Using antitrust for more political purposes not only risks undermining those purposes; it risks unnecessary government interference in a free and competitive market. The result again could easily be that consumers lose out on potential mergers or efficiencies that would have benefited them. In some cases involving technology, the result could even be an increase in costs for once zero-cost products.

Conclusion

The current approach to antitrust is principled and objective with a focus correctly on consumers. As a result, it is a tool to allow competitive markets to continue to flourish while providing a principled mode of correction when anti-competitive behavior arises. Such a standard is adaptable to fast-moving, innovative fields as well as more traditional markets. As conversations around antitrust and Big Tech are likely to continue under either a Trump or Biden Administration, proposed changes to antitrust would likely bring with them new problems as well as fail to cure existing ones.

Jennifer Huddleston is the Director of Technology and Innovation Policy at the American Action Forum.  @jrhuddles

Filed Under: Arizona Politics, Federal Government, Judicial, Small Business, Technology

Christine Jones – The Best Choice To Upgrade Congress

May 15, 2016 by Leave a Comment

Congress needs more individuals who understand and know how to apply technology effectively and safely.

Within just the last 25 years, we have seen the number of computers on the internet explode from under 500,000 to now about two billion. It’s phenomenal and its only going to increase and advance at a faster pace.

In many ways the laws we live under are still trailing the science and technology – in some cases by decades. That has to change. Our lawmakers and especially our Congress needs an upgrade.

Case in point: the use of aerial drones for a variety of reasons including entertainment, commerce or public safety. Just within the last year, local, state and the federal government have been rushing to accommodate their use while balancing privacy, commerce and public safety. We need individuals who can look forward and catch our laws up with science and technology.

Christine Jones is that person and its one reason why she’s the best qualified candidate to send to Congress from Arizona.

Christine understands the vastness and capabilities of technology but she also grasps the rate of change it is having on the culture and our laws.

Christine Jones

Christine Jones testifying before Congress.

As the General Counsel for one of the fastest tech companies, Go Daddy, she was on the cutting edge of integrating technology and the law. She has testified numerous times before Congress advising and educating those writing our laws on how best to do so. She has played a key leadership role in making the Internet safer for children and industries.

Christine Jones is also the founder of the Internet Registrar Summit which brought international Internet business leaders together on an annual basis to establish an industry best practices that advocated for laws and guidelines for conduct and usage. Through her leadership, she has played a key role in establishing the Internet as a safe, secure and stable place for all users and especially children.

Voters in Congressional District 5 should look ahead to the future. Sending someone to Congress who knows how to marry the law with an ever-changing world of technology would raise the level of expertise in updating our laws. Christine Jones is the right person to serve in that leadership role and it’s why we need to elect her to Congress in November.

 

Filed Under: Arizona Politics, Campaigns & Elections, Congress, Editorial, Endorsements, Technology Tagged With: , , ,

Orchestrated Confusion Over UniSource Proposal at Lake Havasu Corporation Commission Hearing

April 1, 2016 by 1 Comment

Reading the latest news story in the Lake Havasu News Herald, it would appear that operative from the rooftop solar industry have caused just enough confusion among ratepayers that the latest proposal to bring economic sense and equity to the energy market will require yet another hearing.

Thursday, in accordance with Arizona law, the Arizona Corporation Commission conducted a hearing in Lake Havasu to hear from ratepayers over a request by UniSource to modify its rate structure in order to iron out inequities in the way customers purchase electricity from the UniSource portion of the grid.

One of those changes would be the implementation of “demand charges” – a concept that charges a customer based on the highest demand placed by that customer during a given unit of time. Most demand is placed on the entire grid during early morning hours and early evening hours when users turn on more electrical loads in their households. It is at that time that the grid experiences its heaviest loads that ultimately costs in maintenance, repairs and even brownouts. (Read my earlier post on this concept.)

The UniSource request would allow the utility company to recover the costs of this demand while reducing costs during non-peak demand times.

Additionally, the request would also allow UniSource to adjust the price it purchases (credits) energy from rooftop solar users through net metering. Currently, that rate is sold back to utility companies at an inflated rate. That inflated rate is shifted to non-solar users who pay the difference causing an economic inequity. There are far fewer rooftop solar users than non-solar users so non-solar users are burdened by this rate inequity.

If approved by the Arizona Corporation Commission, UniSource’s request would not take effect until 2017 and rooftop solar users who purchased or began their leases before June 1, 2015 would be grandfathered into the proposal.

The political takeaway of this is that the rooftop solar industry has partaken of this form of corporate cronyism for too long. Because of a nationwide agenda to pick winners and losers in the energy sector, the solar energy industry has been heavily subsidized and given special breaks through policies like net metering. The industry cannot survive without some form of government intervention and when government pulls out and allows the market to adjust, these companies oftentimes go bankrupt leaving consumers on the hook and employees without jobs.

Here in Arizona, the battle to keep net metering in place is being waged at town hall meetings like we see in Lake Havasu.

NonSolarCustomers

When a utility company like UniSource proposes a innovative compromise to allow the free market to adjust properly to the benefit of all consumers, they are met with chaos and confusion orchestrated by the rooftop solar industry. These companies pay their lobbyists to circulate among a community to stoke the fears of ratepayers and senior citizens on fixed incomes.

What they won’t tell you is that they want a bigger bite at the apple of government subsidies and special deals. Meanwhile, its the ratepayers who bear the burden – those who cannot afford $40,000 systems and those who were told sunny days were ahead when they leased one.

Corporation Commissioners will conduct another hearing in Lake Havasu sometime in the next two weeks.

Filed Under: Arizona Politics, Energy, Government Reform, Regulations, Technology Tagged With: , , , , , , , , ,

There’s Nothing Conservative or Independent About the Current Rooftop Solar Industry

March 30, 2016 by Leave a Comment

Rooftop solar is one of the greatest technologies one can invest in these days. The cost of the rooftop units are coming down; it allows individuals to move toward self-sustainability; It reduces our dependence on foreign oil; and it even allows individuals to go entirely off grid and operate independent of utility companies.

So why would I make a statement about rooftop solar not being conservative?

Don’t get me wrong. If I had the means, I’d take my entire home and business off the grid for the reasons I listed above.

It comes down to one word – Independence.

A few years ago, I jumped on the anti-utility bandwagon over net metering and the push to reduce the retail rate. I had to suspend common sense and all those years of economic education to make the argument. I didn’t have the whole picture and the mountains of research to back up that claim.

315344_AZHomesSolarPanelsThe rooftop solar industry is dependent on taxpayers – especially taxpayers who don’t have rooftop solar units installed on their rooftops. That’s consumers like me who cannot afford to lease a product and service that relies on subsidies from consumers like me. To clarify, rooftop solar is still too expensive that average consumers have to sign a lease over a long-term period in order to make it affordable.

[If you’re gonna invest in technology that gives you independence, pay cash. It really is a liberating experience not owing anyone money – including rooftop solar companies!]

The rooftop solar industry is also part of broader political agenda by those typically on the left and in environmental movement who seek to eliminate all non-renewable forms of energy production. This comes at a tremendous cost – especially to consumers.

Integral to this political agenda, policy makers and rooftop solar executives have created a climate in order to make an expensive industry appeal to average consumers. It comes down to manipulating the market and creating artificial incentives in order to attract more consumers to its product.

Imagine if the top executives of Mercedes, Jaguar and Rolls Royce sent their lobbyists to Washington to obtain taxpayer subsidies so they could attract you into a lease of one of their vehicles? You sign a lease to get into their car. They get a break through some tax loophole and the cost of taking care of our roadways is passed on to the individual who can only afford to drive a 10-year-old used car.

The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy. It’s a clear example of corporate cronyism that puts taxpayers at risk or worse, leaves them footing the bill when the company goes bankrupt – as we’ve already seen several times.

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy.[/pullquote]

The rooftop solar has been benefiting from these market manipulations through the policy of net metering. They tell you that you can sell your solar-generated electricity back to the utility companies and pay less for your overall electricity. On a self-interest level, that’s great. But what they don’t tell you is that you’re selling back that electricity (actually, you’re receiving a credit) at an inflated rate and someone else is paying for it – a redistribution of utility costs.

Rooftop solar companies don’t own the grid and they don’t pay for the cost and maintenance of the grid. And because utility companies are paying above-market inflated rates, the cost of maintaining the grid is being shifted over to those without solar technology.

In effect, the rooftop solar industry has created a whole new level of dependency. They’ve made leasing consumers dependent on them. They’ve become dependent on net metering policy and utility companies have become dependent on non-solar customers. And when a solar company pulls its plant out of a state like what recently happened in Nevada, they leave a whole lot of people without jobs. There’s nothing sustainable about the overall climate and policy in which the rooftop solar industry operates.

In a perfect world, everyone would be able to afford solar technology without signing a long-term lease contract with the rooftop solar industry. We wouldn’t have to rely entirely on the grid and utility companies wouldn’t have to worry about covering the cost of maintenance in order to provide a reliable source of electricity.

To move toward that perfect world, we can start by eliminating the policies that pick and choose winners and losers through subsidizing and manipulating the energy marketplace.

That’s where real independence can begin and energy independence can thrive.

Filed Under: Arizona Politics, Energy, Special Interests, Technology, Utilities Tagged With: , , , ,

Net Metering Tax Credits Discriminate

September 30, 2014 by Leave a Comment

Recent legislation providing solar tax credits for residential homeowners has allowed billionaires, corporations, and Wall Street financiers to profit at the expense of working class Americans.  Solar corporations leasing panels to home owners, rather than selling, have reaped the financial benefit of solar tax credits intended for home owners to the tune of hundreds of millions.  These tax credits to solar companies have boosted dividends for their shareholders at taxpayers’ expense, while panel-leasing home owners get no immediate financial benefit.

meterWorse.  Solar tax credits discriminate against lower income communities.  Group housing, where many lower income families reside, cannot install residential solar panels, and are therefore not eligible from the get-go for these special tax credits.

Arizona is subsidizing the solar industry with $1.2 billion on residential solar, and not a dime goes to the state’s lowest income sectors – yet, another reason not to have discriminatory solar tax credits.

Further, after residential panels are installed at huge costs to taxpayers, the system of net metering goes to work, also discriminating against the working class.  Owners of solar panels can buy power from the grid as needed, or ship surplus power back to the grid when they produce more than they use.  Under net metering, solar panel owners, however, avoid paying for the service and repairs to maintain the grid.  These costs to maintain the grid are then shifted to non-solar users, placing a higher financial burden on this group, resulting in a disproportionate share of the burden falling on the aforementioned lower income sectors.

In Arizona, taxpayer subsidized solar panel ownership has led to the adding of “environmental programs cost adjustment factor” and renewable energy fees on utility bills, raising financial burdens for all non-solar users, lower income families included.  For example, the city of Scottsdale has a median family income of over $92,000.  Just in the past 5 years, they have had over 1,200 solar installations, which are eligible for state and federal subsidies.  In contrast, an area in south Phoenix with 29,000 residents and an average income of $41,000 has only 45 residential solar installations.  This is just an example, but the statistics are undeniable:  Taxpayer subsidies go to wealthier communities by a factor of 26 times more than lower income communities.

Regressive solar tax credits should end immediately.  Why have we chosen one industry over another?  And worse, we’ve chosen a discriminatory industry that keeps lower income communities down by unfairly forcing them to pay for others solar installation and operation.  Under any sun, these policies are just plain wrong.

Joe Galli

Former Executive Director – North Scottsdale Chamber of Commerce

Filed Under: Arizona Politics, Energy, Federal Government, Guest Opinion, Taxation, Technology, Utilities Tagged With: , , ,
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