Think you are capable of managing your own affairs? The government might not see it that way. Over the past few decades, a growing field of scholarly thought has come to view human beings as fundamentally irrational creatures who need to be guided by government toward the right choices. These theories have in turn been used to justify increasing encroachment of the nanny state into everything from what we eat to what we buy and how.

Central to this agenda is the notion of a “nudge.” As described in their book, “Nudge: Improving Decisions About Health, Wealth and Happiness,” economist Richard Thaler and former Obama administration official and law professor Cass Sunstein describe nudges as attempts to influence people to make better choices by changing the way those choices are presented. If you want to encourage people to eat healthily, for example, you might require that restaurants put calorie counts next to each item on their menu.

For an example of nudging closer to home, one can look to SB 210/HB 199, proposed by state Sen. Clemente Sanchez, D-Grants, and Rep. Debbie Rodella, D-Española, which takes aim at rooftop solar installation. Rooftop solar has been growing rapidly in New Mexico due to falling prices and the state’s sunny weather. Critics, however, say that homeowners who opt for solar may not know what they are getting themselves into.

The legislation would require extensive disclosures to potential rooftop solar buyers on everything from performance guarantees for power generation to the effect installation could have on property taxes. Customers are also required to consult with tax experts and their utility before installation. Faced with such an onslaught of information, consumers might just tune it all out. Some might conclude the whole thing just wasn’t worth the trouble.

That, in fact, might be the idea. The legislation is supported by the utilities, which have historically viewed rooftop solar as a competitive threat to their business model. For nearly a century, electric utilities have been the only option for people who need electricity. The recent rise of distributed generation like rooftop solar is giving consumers an alternative, and the incumbent companies don’t like it. The more people generate their own electricity, the less they will need to buy from the grid. No one likes competition, especially if you aren’t used to it.

There is also a danger that the nudge might turn into a shove if just giving people information doesn’t lead them to make the “right” decision. Many states have sought to impose special fees on customers who generate electricity via rooftop solar, citing concerns that too much solar use might undermine the economic viability of the grid. In Arizona, which passed a similar solar disclosure bill last year, legislators are already calling for a crackdown on solar installation companies based on claims they aren’t following the law. Particularly for smaller installation companies, just following the red tape can be a costly enterprise.

All commercial transactions have a potential for fraud, of course, and New Mexico law already provides remedies for such cases. But there is no reason to think that homeowners are particularly vulnerable to abuse by solar installers. As in so many other cases, this legislation that’s billed as “consumer protection” is really about protecting incumbent electric companies.


Image by Ross Bell

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