Since 2011, the top four coal mining companies in the U.S. have lost 99.9 percent of their market capitalization. That’s an astonishing number. A confluence of social and scientific motivations underpins the collapse of coal, but the industry’s erosion is fundamentally the symptom of a market shift due to economic factors. Sinking natural gas prices resulting from the improvement of hydraulic fracturing technology have eliminated the cost advantage coal-fired power plants used to hold over their natural gas burning counterparts, and EPA regulations in the name of, Heaven forbid, public health and environmental consciousness have made the use of the black mineral for energy production or metallurgical purposes much more expensive, reducing the demand for coal. Consequently, coal that used to be trading at $300 per ton in 2013 was going for $81 per ton at the beginning of this year. Some, including members of the Alabama Public Services Commission (PSC), will blame this on “radical environmentalist” policies of the Obama administration, but many experts, like Stanford’s Mark Jacobson, director of the Atmosphere/Energy Program there, contend that it is in fact the natural result of market forces. Regrettably, many are fighting the shift in energy instead of harnessing it for maximum benefit.
While executives and politicians argue who’s to blame for the fall of the coal industry, its real victims are the everyday people left in its wake. Coal has been the bedrock of support for American families, communities and economies for decades. What do those communities do when their foundations crack? The successful ones pick up the pieces, identify their skill-set, and move forward where they can.
In many states, solar energy has been helping to fill the ever-growing void left by coal’s demise. As the technology becomes more affordable and demand rises, the need for workers in the solar industry has skyrocketed, growing 13 times faster than the rest of the economy, according to a 2015 study. The openings in the solar industry can cushion the landing for out of work coal professionals.
But the burgeoning solar movement has failed to gain traction in Alabama, due in part to Alabama Power’s government-granted electricity monopoly in the lower two-thirds of the state. As solar power has entered common use, utilities commissions around the country have adopted means to incorporate it into their energy portfolio, including net metering policies, third-party ownership agreements and subsidies for solar construction. Alabama, in contrast, has no net metering policy, no clear rules on third-party ownership, and any subsidies awarded by either the state or federal government are undercut by Alabama Power’s stifling policy on solar power.
The policy states that any solar installment of under 100 kilowatts incurs a charge of $5 per kilowatt per month. Alabama Power knows that this fee, which adds up to $25 per month for an average household solar power system, makes solar power an economically irresponsible choice for the majority of its customers. This prohibits any growth in Alabama of the solar industry –– an industry that could be stepping in to fill the gap coal is leaving behind.
That is not to say that Alabama Power can’t play the solar game themselves. When the PSC approved 500 megawatts of renewable energy capacity for the company, they planned large solar installments at the Anniston Army Depot and Fort Rucker and just this summer announced plans for an enormous solar farm in Chambers County as part of a power purchase agreement with Walmart –– a company with the aspiration of running off 100 percent renewable energy.
But Alabama Power’s close working relationship with the Public Services Commission has resulted in no opportunity for other companies to make significant gains in the solar industry. Maybe Alabama Power has gotten too used to its position as a state-sanctioned monopoly and is afraid to let forces outside its corporate walls drive energy innovation in the state. But as the most forward-thinking utility regulators recognize, the future of energy in America involves a diverse base of power generation, mixing large facilities like those of the last century with distributed generation like rooftop solar. Hopefully, energy leaders in the state will recognize the collaborative possibilities available to improve lives through the development of a robust solar energy market. If not, communities based on coal around the state will continue to flounder, with the moral culpability resting at the feet of those who chose not to embrace change but instead to stifle innovation and economic development in the service of Alabama Power’s bottom line.
Jeff Rogers is a senior majoring in chemical engineering. His column runs biweekly.