I can’t decide if the California legislature’s problem is ignorance or arrogance. Or possibly, a deadly combination of the two. Judging by appearances, the legislature is composed of many lesser lights led by a handful of leftists who are so certain of their moral purity that their mere will can bend reality to their policy preferences.
It also helps that the media coverage of legislative and regulatory initiatives is done by reporters who are as ignorant of economic reality as the bureaucrats.
A recent report in Engadget.com is a perfect example of how this deadly combination makes life more expensive for the people living under the bureaucrats’ rule.
The California state Energy Commission, allegedly monitored by the legislature, is going to decree that in the future, 2020 in this case, every new home build must include an array of solar panels on the roof to provide energy for the homeowner.
This edict includes single-family homes, apartments, and condos. In a state where housing is so scarce and demand so high that a San Francisco shack sells for $1,000,000, this is madness. This rule will serve to make new homes and apartments too expensive for even more Californians.
The story blithely states, “The new standards are poised to hike construction costs by $25,000 to $30,000 (about half of which is directly due to solar), but the self-produced energy is estimated to save owners $50,000 to $60,000 in operating costs over the solar technology's expected 25year lifespan.”
There are two problems with that conclusion. One, the cost estimate is going to be too low by a factor of at least two. Once the government mandates technology be included the price is no longer subject to market forces. Secondly, the mortgage company isn’t going make a loan based on the operating cost of solar technology, it’s going to make the loan based on the price of the house and the builder is going to collect all the cost in one fell swoop.
Then the reporter completely misreads how price elasticity works. He appears to believe the weather determines the market for solar and not housing prices. “It's relatively easy to do this in the region given California's abundance of warm, sunny days and high real estate prices — it's hard to see this happening in the American Midwest, where winter and lower home prices could make solar decidedly less practical.”
The fact is where prices are initially lower there is more room to add solar cost because the total price will still be less than in California. In California, the minimum $60,000 increase in price will push more and more people out of the market and maybe out of the state.
Currently only 20 percent of new single-family homes in California include solar power. That is because the market will only support the 20 percent level. That’s not good enough for power-hungry (no pun intended) leftist regulators and politicians. Their goal is to force buyers to pay for something 80 percent of the market doesn’t want.
Good luck with that. California may need its own wall soon, to cut down on the residents fleeing to other states where home buyers, and not leftists, decide what they want to buy.
Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker’s bureau. Read more reports from Michael Reagan — Go Here Now.
Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.