Congress Should Have Let the Sun Go Down on Solar Subsidies
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.