Congress Should Have Let the Sun Go Down on Solar Subsidies

 

shutterstock_79128529And in one fell swoop through the 2,000-page omnibus spending bill, Congress again saddled American taxpayers with billions in handouts to the perpetually foolish and failing solar industry. In what is sure to foster the very same practices that led to the infamous Solyndra debacle, renewable energy handouts through the Solar Investment Tax Credit (ITC) are now guaranteed until at least 2022. In other words, don’t expect ITC or its cohorts to vanish any time soon.

While solar stocks soared after the news broke of Congress’s ill-advised extension of the ITC, taxpayers should remain skeptical of the industry’s so-called success. Despite gargantuan subsidies over the past five decades, the solar industry has yet to make a convincing case for itself. In fact, there is little evidence of success. The fact is that a coddled solar industry simply can’t make it on its own.

There are many egregious recent failures of the American solar policy. As part of the Obama Administration’s solar loan program through the Department of Energy (DOE), a Spain-based solar company has received $2.7 billion in taxpayer funds since 2010. Counted among President Obama’s favorite solar companies, Abengoa solar plants across the US have massively underperformed.

As an added insult to injury, Abengoa is now on the verge of bankruptcy. If the failing solar company does declare bankruptcy, it will be the biggest DOE loan program failure to date. The DOE has already seen at least three bankruptcies associated with these solar subsidies. Taxpayers have lost millions on account of this nonsensical loan program, with billions more to go.

Abengoa should come as no surprise, however, since the solar industry has a long record of fleecing taxpayers. In addition to the fraud, mismanagement, double-dipping on taxpayer funds, and the tremendous dishonesty the industry has demonstrated, solar has simply failed to succeed. Take, for instance, the high-tech Ivanpah solar plant in California that has generated a disappointing 40 percent of expected electricity after more than a year in operation. Ivanpah alone has cost taxpayers $2.2 billion. How embarrassing.

Solar power provides the least bang for the American taxpayer’s buck. The federal government has heavily subsidized the solar industry for years, but solar continues to provide only 0.6 percent of the country’s energy supply. And yet, solar will continue to receive taxpayer money. Apart from moronic, such an energy policy is reckless.

The solar industry is one big loan and subsidy bubble ready to burst. Preferential treatment from the government has skewed the rules of free enterprise, and thus the solar industry’s success is not real – it is fabricated, and its failures are disguised by billions of taxpayer funds at its disposal. Furthermore, private investments into solar have been made under false pretenses, propping up an industry that is bound to fail. After all, a government handout is no indication of future success.

If history shall remain a faithful indicator of government policy, however, none should expect the solar industry to ever be free of the ITC or other subsidies. When a policy is implemented granting one industry any form of government favoritism, rarely does that favoritism ever fully fade away. When favors in the form of subsidies are gleefully handed out to the highest bidder with the most powerful lobby – and when that lobby enjoys popular consensus on its side, as is the case with the solar industry – no Congress will turn the tide back toward unsubsidized competition.

Get ready, taxpayers.

The solar industry will remain the petulant man-child living in your basement who never learns but, at the mere threat of independence, unabashedly grovels until he receives what he feels entitled to.

And why not? It’s worked so far. Taxpayers will continue to get burned by solar subsidies because Congress missed a perfect opportunity to let the sun go down on these subsidies.

Like this post? Want to comment? Join Ricochet’s growing community of conservatives and be part of the conversation. Get your first month free.

There are 16 comments.

  1. Pilli Member

    We can also include wind based power generation and Ethanol subsidies. Who thinks it is a good idea to burn food to power cars? Surely on one in Cameroon.

    • #1
    • December 29, 2015, at 12:37 PM PDT
    • Like
  2. EHerring Coolidge

    I have seen a big push to sell homeowners on solar – run into salesmen everywhere and they even knock on my door and don’t want to take “no” for an answer.

    • #2
    • December 29, 2015, at 1:45 PM PDT
    • Like
  3. Robert McReynolds Inactive

    But, but this was necessary because……..sssssssSSSSSSSHHHHHUTDOWN!!!!!!!!!!!!!!

    • #3
    • December 29, 2015, at 1:46 PM PDT
    • Like
  4. Songwriter Member

    And all the while, the single greatest source of hot air – Washington DC – goes untapped as an energy source.

    • #4
    • December 29, 2015, at 2:22 PM PDT
    • Like
  5. raycon and lindacon Inactive

    Donald Trump! Donald Trump! Donald Trump! Donald Trump! Donald Trump! Donald Trump! Donald Trump!

    • #5
    • December 29, 2015, at 3:20 PM PDT
    • Like
  6. Ball Diamond Ball Inactive

    I saw a couple of people link to things, but no defense of the omnibus. I await any method to couple the utter lack of defense of the omnibus with continued support for Ryan et al. This is a big pregnant pause in what is already shaping up to be a showdown.

    This omnibus is a disaster.

    • #6
    • December 29, 2015, at 4:08 PM PDT
    • Like
  7. James Gawron Thatcher

    David,

    I learned this first hand about 40 years ago. When a subsidy reaches the 50% mark the inducement for corruption is massive. The incentive to make a technology that can at least break even on savings v. costs is removed or so distorted that companies that actually do make improvements will go nowhere. Meanwhile, the companies that play the subsidies game to the hilt will suck up all the investment capital and then poison the market with products that are perennial disappointments.

    The solution is obvious. Cut the subsidy down. Anything greater than 15% will just produce disaster. If we can’t get that done then it needs to be cold turkey. Those companies that are still around when the dust settles will deserve to be. We might see some real products then.

    Regards,

    Jim

    • #7
    • December 29, 2015, at 5:29 PM PDT
    • Like
  8. David Deeble Member

    Leave it to politicians to figure out a way to charge us for the sun. Thanks for the column, David: I enjoyed it.

    • #8
    • December 30, 2015, at 12:39 AM PDT
    • Like
  9. Pony Convertible Member

    I am an engineer. I studied solar energy as part of my course work. There are applications where it makes sense. On top of your house that is connected to the grid isn’t one of them.

    I have talked to several solar system salesmen about adding solar to my house. I only do so for entertainment. The most recent told me that I would save $250 per month on my electric bill, which is hard to imagine since I have never had an electric bill over $200 a month and the local utility won’t buy my excess power.

    One thing I ask everyone of them. What is the expected energy payback time? How long will it take to generate the energy it took to manufacture and install the system? They can all give you figures on how long you can expect it to take to get your financial payback, but if I am concerned about saving the planet and my carbon footprint. The energy payback is more important.

    I have never got an answer from an installer. I did get an answer from a solar panel manufacturer. He said they don’t expect the their panels to last long enough to recover the energy it took to manufacture them.

    Only with government subsidies would the solar industry exist.

    • #9
    • December 30, 2015, at 5:01 AM PDT
    • Like
  10. Pony Convertible Member

    The city I live in is installing solar panels on the roof of our city office building. Due to expenses of having to redesign and modify the roof to support them the cost is estimated to be just short of $1 million. The expected savings are $10,000 per year. So in 100 years we will break even, assuming the system works that long (it won’t).

    • #10
    • December 30, 2015, at 5:04 AM PDT
    • Like
  11. David Williams Contributor
    David Williams Post author

    Thanks to everyone for the helpful comments and for reading the posting. TPA continues to follow this issue and it was extremely unfortunate that the last minute omnibus included an extension as the subsidy was weeks away from ending. Pilli it was also disappointing to see wind retroactively subsidized and extended into the omnibus and TPA is no fan of the Renewable Fuel Standard (RFS). Pony Convertible thank you for sharing your insight into the industry and your story.

    • #11
    • December 30, 2015, at 5:27 AM PDT
    • Like
  12. James Gawron Thatcher

    Pony Convertible: The most recent told me that I would save $250 per month on my electric bill, which is hard to imagine since I have never had an electric bill over $200 a month and the local utility won’t buy my excess power.

    PC,

    This is the greatest absurdity and tells you that Solar Energy and Green Industries have nothing to do with doing things that work and everything to do with ideology.

    The very nature of Solar panels is that they produce a large amount of power during a narrow window around high noon. By artful low cost parabolics one can increase the yield a little early in the morning and late in the afternoon. All storage systems are extremely expensive and have high maintenance costs.

    The obvious thing to do is put low-cost high yield panels on your roof and run the electric meter backwards when you are producing more than you are using. If you actually produce net more than you use than the utility company should send you a check. This completely doable and immediately implementable solution has been available for forty years. Improvements in panel manufacturing and computerized power regulation only make it easier.

    This has not been done for two reasons. First, the utilities have dragged their feet. Second, the environmental ideologues and hustlers don’t want what works they just want money and to continue to harangue the American people with their nonsense.

    I think if you are objective you will realize that the utilities, far from being the sinister force they are made out to be, could be easily convinced by popular sentiment & political will. It is the environmental ideologue Greenies that would rather have their fantasy of renewables uber alas than supporting what would work. We keep giving the Greenies huge tax breaks so they can continue their tyrannical obsession.

    Regards,

    Jim

    • #12
    • December 30, 2015, at 7:32 AM PDT
    • Like
  13. Pony Convertible Member

    James Gawron:

    Pony Convertible: The most recent told me that I would save $250 per month on my electric bill, which is hard to imagine since I have never had an electric bill over $200 a month and the local utility won’t buy my excess power.

    PC,

    The obvious thing to do is put low-cost high yield panels on your roof and run the electric meter backwards when you are producing more than you are using.

    The problem with letting your meter run backwards and thus selling power at the same rate as you buy it is that the cost of your power is mostly to pay for the distribution system, not the fuel and power generation. Thus, you would not paying your share of the overhead. That is why the power companies are resistant to buying back power.

    • #13
    • December 30, 2015, at 7:50 AM PDT
    • Like
  14. James Gawron Thatcher

    Pony Convertible:

    James Gawron:

    Pony Convertible: The most recent told me that I would save $250 per month on my electric bill, which is hard to imagine since I have never had an electric bill over $200 a month and the local utility won’t buy my excess power.

    PC,

    The obvious thing to do is put low-cost high yield panels on your roof and run the electric meter backwards when you are producing more than you are using.

    The problem with letting your meter run backwards and thus selling power at the same rate as you buy it is that the cost of your power is mostly to pay for the distribution system, not the fuel and power generation. Thus, you would not paying your share of the overhead. That is why the power companies are resistant to buying back power.

    PC,

    So let’s see. We go on giving huge amounts of tax money so that fundamentally inefficient systems can continue to be implemented while we are satisfied by feel-good nostrums.

    Obviously, a discount on the price of the power produced by the user could be negotiated between the utility and the user. The additional monitoring device required will be paid for by the user.

    How difficult would this be if this society stopped talking environmental cr#p and got down to business.

    Regards,

    Jim

    • #14
    • December 30, 2015, at 8:05 AM PDT
    • Like
  15. EHerring Coolidge

    Me, to persistent solar salesman at my door, “I don’t want that stuff on my roof. It is 16 years old and will need to be replaced soon.”

    Idiot salesman, “Your roof looks good to me.”

    • #15
    • December 30, 2015, at 1:52 PM PDT
    • Like
  16. James Gawron Thatcher

    EHerring:Me, to persistent solar salesman at my door, “I don’t want that stuff on my roof. It is 16 years old and will need to be replaced soon.”

    Idiot salesman, “Your roof looks good to me.”

    EH,

    Completely true. Idiot Solar Salesmen are used to harassing people with saving the earth nonsense. The integrity of your roof. The aesthetics of your house which will effect price when you sell. Ease of maintenance. Absurdly long payoff times. All these normal concerns the honest hard working homeowner is supposed to swallow so the Solar crusade can go forward.

    If he was a real salesman of a real product he’d have answered every concern properly or he wouldn’t be able to sell squat. The way it should be.

    Regards,

    Jim

    • #16
    • December 30, 2015, at 2:00 PM PDT
    • Like