What would happen if the US Department of Energy decided to help low-income households afford solar power by giving money to companies that report that they lease solar panels to these households? In all likelihood, fraud would be a difficult and costly problem, and solar companies would benefit more than the households. Despite the obvious flaws of a system in which companies receive money based on their service claims, this is essentially how the Federal Communications Commission’s (FCC) Lifeline program works: Telecommunications companies receive money based on how many households they claim as Lifeline customers. There is a better way — a direct subsidy would be more beneficial to low-income households.
Read “Help the poor by dropping Lifeline” on AEI.