Another redistribution I question

A regular reader of monoblogue sent me a tip about Maryland’s grant program for solar and geothermal energy programs – while the fiscal year just began on July 1st, he noticed on the WBOC website an AP story out of Annapolis which stated the entire $591,000 devoted to this year’s grant allocation has already been spoken for.

While J.M. surmised that I should “burn the O’Malley Administration a new asshole,” personally I think that in a time of budget shortfalls that these programs of dubious benefit need to be among the first to be axed. I question the value of these subsidies and why they should be required to make solar or geothermal more competitive with conventional heating sources – both of these systems should be able to sell themselves on their own merits if they’re the best thing since sliced bread; thus, no grants should be necessary. Obviously the state of Maryland, in its haste to consume as much of the green Kool-Aid as possible, feels otherwise.

According to the story, interest in the systems has been piqued because the state raised the maximum amount of each grant. HB377 pegged the grant figures thusly:

  • The lesser of $2,500 per kilowatt or $10,000 for newly installed electrical generation capacity (up from $3,000 or 20% of installed cost);
  • The lesser of $3,000 or 30% of installed cost for solar water heating (up from $2,000 and 20%);
  • The lesser of $1,000 per ton or $3,000 for a geothermal system on residential properties (up from $1,000);
  • The lesser of $1,000 per ton or $10,000 for a system on commercial properties.

Two major changes in existing law were the addition of commercial properties to grant eligibility and a sales tax exemption for solar and geothermal equipment (again, regulating behavior through the tax code.) So not only did $591,000 go to this grant program, the state made no sales tax on the thousands of dollars of equipment that was sold – if all of the $591,000 was sold as equipment that’s a loss of about $35,000.

I’d also be interested in knowing just who got these grants, and where their political contributions were made. While I’m sure many were on the up and up, something tells me a few friends of O’Malley managed to have their homes redone with solar or geothermal heating on the state. In fact, if the state of Maryland continues to insist on skewing the home heating market with grants like these, part of the deal should be a nice large sign placed in public view at the property in question detailing exactly how many tax dollars were given to the property owner.

This was one of the bills I considered for my Accountability Project but opted not to use – probably because the House votes were near-unanimous (137-0 and 140-0) and the Senate vote was 42-5 (Vote #1168). I already had 35 Senate votes so the bill wasn’t deemed as high of a priority as others making the cut. (By the way, Senator Andy Harris’s “environmental” record would be enhanced by this vote since he was in the majority – one of the few votes I would have disagreed with him on. The five voting properly against were Senators Della, Exum, Greenip, Mooney, and Pipkin.)

Of course, because the money ran out so quickly the state is sure to increase the pot for FY2010. In the meantime, look for utilities to pay for supplying more grant money as the AP story mentions the possibility of funding from an upcoming greenhouse gas allowance auction (yep, cap and trade rears its ugly head on September 25th.) Meanwhile, the home heating market becomes more tilted in favor of so-called renewable technology, a subsidy we’re going to pay for in more ways than one.


2 Responses to “Another redistribution I question”

  1. ShoreThings on July 29th, 2008 2:11 am

    Don’t you have anything to say about the billions of dollars that will be “redistributed” to nuclear power companies to build plants that are no longer economically feasible? The nuke subsidies make Maryland’s alternative energy grants look like chump change.

  2. […] ill-gotten gains will go to replenish a program which was stiffed in the state budget, the grant program for solar and geothermal energy. Most of the rest will disappear into the maw of Maryland’s […]

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