The bedrock problem is that solar power simply isn't economic, as reader OBloody Hell showed here years ago. Though green zealots hoped that would change, solar power remains a myth today, says Walter Russell Mead at American Interest:
[T]here’s another factor behind the failure of so many Obama administration initiatives in this field. Because alternative energy generation is expensive and inefficient, it requires some combination of subsidies, high energy prices and forced purchases to make these investments pay off.I'm guessing the market recognizes that solar and such won't realize sufficient rates of return; this has been common knowledge for years.
The Solyndra guarantee and related programs were all developed back in the heady early days of the Obama administrations when delusional greens thought their global agenda was on the verge of being realized. Cap and trade and other aggressive energy policies would artificially jack up energy prices in the US to the point where demand for solar and other alternative energy would grow. The global carbon treaty would provide a permanent source of demand for green energy.
The political assumptions underlying the green investment boomlet turned out to be false. There will be no global carbon regime for the foreseeable future; there will be no cap and trade and no aggressive federal programs to raise energy prices during the deepest recession since World War Two.
Perhaps even worse from the green point of view, a cascade of discoveries and technological advances has dramatically increased the supplies of oil and gas in the western hemisphere -- including huge new domestic energy supplies in places like Pennsylvania, Ohio and upstate New York. These discoveries are devastating to the politics of the environmental movement. . .
The collapse of the green political structure (cap and trade plus global carbon treaty) and the transformation of the American fossil fuel supply have dramatically weakened the case for alternative energy. Investors take heed.
Which must be why Obama just doubled-down, deciding last Friday to drop another $4.7 billion on solar power loan guarantees. Sure, the Administration claims this creates jobs and reduces carbon emissions. And lefties argue that government should subsidize where the private sector can't or won't
But this isn't the moon landing. Alternate energy can't help if it's uneconomic--even if NASA made solar panels. Similarly, the claimed benefits won't come if no one buys the product (the jobs mostly are short-term construction). As Mead shows, absent gun-to-the-head cap and trade laws, no one will. The free market largely avoided Solyndra for a reason. And when did Democrats become disciples of corporate welfare?
Coyote Blog's Warren Meyer observes:
[T]he difference with the private sector is not that the private sector makes no mistakes, but there is real accountability for those mistakes which lead to changes in behavior.Exactly. Government is incapable of picking product winners and losers--and this Administration doesn't learn from its errors.
In the next batch of bankruptcies, add about $5 billion to the 2013 Federal budget deficit--due to decisions by the supposed smart guy.
(via readers Doug, Warren)
3 comments:
>>> And lefties argue that government should subsidize where the private sector can't or won't
When it's just a matter of simple risk, but with exceptional reward... or the term of the risk (i.e., the payoff is far enough off that private capital won't go after it because there's perceived equivalent money to be made in the shorter term)... THEN this idea makes some semblance of sense.
The space program was just such an example, and it paid off well despite the current shambles it is all in.
But for anything in the short term, the idea of government "investing" is flat out stupid. If investors won't go for it in the short term, it's because people who are experts and making risk and reward analysis -- tested experts who have been right far more often than wrong -- have decided that IT'S A BAD BET -- usually a VERY bad bet, or else there'd just be a greater ROI offered.
This whole notion that the government should do it when private industry says "thanks, but no thanks" is a product of sheer, flat out dunderheaded lack of any kind of comprehension of how investing works, and why it works the way it does.
Why the hell does anyone listen to the economic ideas of dunderheaded incompetents? One might just as well be a die-hard socialist 20 years after the fall of the USS... oh, wait. :-S
BTW, you can also argue that the shambles the current space program is in is entirely due to that EARLY manipulation by the Fed.
There was a natural progression planned to get us into space using the various "x-craft" type development that would have lead to horizontal take off and landing craft, rather than the quick-fix man-on-a-missile approach that the early program used.
Money that would and perhaps should have gone into craft development was instead siphoned into making the Apollo launch vehicle, which, while an amazing machine and one of humanities' finest accomplishments, was still a defacto dead-end.
It also led to the boondoggle of a shuttle, which, also being a vertical take-off vehicle hasn't paid much for development in that HTOHL capability. This siphoned off still MORE money that might have been used to give us a permanent space presence by making pounds-to-orbit far less expensive.
So, as successful an example of "government investment" paying for itself, the space program is also a cautionary tale about diversion of investment and the warping effect of the government on naturally developing markets and technologies.
We might actually BE at "2001" and beyond if it weren't for Apollo. I doubt it, but who knows...? We'd certainly not be unable to put a man in space without some other nation's help at this point, I'd wager.
>:-S
>>> Though green zealots hoped that would change
Also, you kind of understate what I showed -- not only was it NOT economical, I pretty much showed that it was defacto NOT POSSIBLE for it to become economical.
So "hoping that would change" is the equivalent of hoping that the sky would turn to a steady and consistent puce color, or that water would flow uphill for a bit...
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