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The Importance of Choosing Life

The Importance of Choosing Life

Physician-assisted suicide, much like abortion and same...

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Involuntary Hogicide: NYC Mayor de Blasio groundhog slayer!

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D’Souza spared prison time

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GameStop, Inc.

Business

SETTING

U.S Banks Post Second-Highest Profit in 23 Years in 2Q 2014

U.S Banks Post Second-Highest Profit in 23 Years in 2Q 2014

( Wall Street Journal ) Banks are lending to companies and individuals at the fast...

OP/ED

SETTING

Politics

SETTING

Public Funding Fail: Solar Power Failures Adding up

No joke for taxpayers

Sooner or later, the laws of economics prevail, even in heavily subsidized industries like solar power. The latest evidence that government manipulation cannot overcome economic reality is the decision by BP PLC, the giant British energy company, to leave the solar power business.

BP has developed solar energy for 40 years and for more than a decade touted its "Beyond Petroleum" campaign. The Wall Street Journal suggested, however, that BP's solar experiment was more gimmick than serious investment. BP spent millions trying to go green, but simultaneously spent billions on its traditional gas and oil business.

International competitors, particularly China, turn out solar panels more cheaply, even as global demand has slowed. When supply outstrips demand, higher-cost providers suffer, as BP learned. Even government subsidies, without which solar manufacturers couldn't begin to compete with less-costly, conventional energy, couldn't keep BP competitive.

A similar lesson was learned this year by Solyndra, the bankrupted Northern California solar-panel maker that burned through $535 million in federal guaranteed loans. Last week, First Solar, the only pure-play solar-panel maker in the S&P 500 stock index, issued a profit warning for 2012, as profit fell to a four-year low, and the company said it will shift to large-scale utility projects rather than residential solar panels.

"(B)eyond the United States," the Journal reported, "there have been a rash of recent solar company failures in Germany as well." The failures come as China, which heavily subsidizes its solar manufacturers, flooded the market with less-expensive products, and as other governments ratcheted back their own tax-financed subsidies.

Solon became the first publicly traded solar company to file for bankruptcy in Germany, unable to repay loans of 275 million euros.

Since 1990 Germany has imposed mandates that utilities must pay higher-than-market prices for solar and other so-called renewable energy sources, driving retail costs 46 percent higher than conventional sources, Bloomberg New Energy Finance says.

California government mandates designed to stimulate renewable energy mean that utilities "are committed to spending — and their ratepayers to financing — at least $6 billion in above-market power costs, with more to come," according to columnist Dan Walters. Electric bills for U.S. consumers skyrocketed in the past five years, adding $300 a year to household costs, USA Today reported.

This should be unsurprising. President Barack Obama three years ago said to move the nation off traditional energy sources and on to these impractical alternatives, "electricity rates would necessarily skyrocket."

So-called renewable energy is possible only if government demands those sources replace conventional energy, and subsidizes their manufacture, purchase or operation with tax dollars. Even then, there isn't enough subsidy — let alone demand — to make these systems cost-effective. Sooner or later, economic reality prevails.

REPRINTED FROM THE ORANGE COUNTY REGISTER

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