A Market Killed by Design

Two years is long enough to prove a point.

In September 2019, the Louisiana Public Service Commission, urged on by Entergy, voted to cut the compensation paid to homeowners who send surplus rooftop solar power back onto the grid. The utility framed the change as a matter of fairness, arguing that customers without solar panels were quietly subsidizing those who had them. It was a tidy argument. It was also incomplete, for it asked what solar owners cost the system without ever asking what they contributed to it.

We warned at the time that the rule would not correct a market; it would end one. A homeowner who installs solar panels is making a decades-long wager on the value of the energy that panel will produce. Reduce that value sharply enough, and the wager no longer makes sense — not to the homeowner, not to the installer who employs a crew on the strength of that decision, and not to a state that had, until that vote, been building a modest but genuine solar economy of its own.

The reporting bears this out. NBC News this week documented what our members have watched happen in real time: sales among Louisiana's largest solar installers have fallen by roughly ninety percent since the Commission's vote. Two years of hiring, training, and supply-chain building, undone by a single rate decision. That is not a market adjusting to new information. That is a market killed by design.

There is a lesson in this for Louisiana beyond solar, and it concerns who is permitted to write the rules that govern a market and in whose interest. When the entity most threatened by competition is also the entity advising the regulator on how that competition should be priced, the outcome is rarely accidental. Reliability and fairness are proper aims of utility regulation. They are not, however, the same thing as protecting an incumbent from having to compete.

Our position has not changed and will not: Louisiana's homeowners and businesses have a right to the value of the energy they generate on their own property, and the Commission's obligation is to price that value honestly, not to price it out of existence. Restoring a net-metering framework that reflects the real worth of distributed solar is not a subsidy. It is the removal of one.

We will keep making that case before the Commission and the Legislature, on behalf of an industry that employed thousands of Louisianans two years ago and could again, given rules that let it. Advocacy of this kind does not end when a vote is lost. It continues, session after session, until the policy catches up to the facts.

*Seersucker Strategies provides government affairs and association management for the Gulf States Renewable Energy Industry Association and other clients navigating Louisiana's regulatory landscape.*