“In September the government abruptly changed course, cutting payments and capping solar construction. Puertollano’s brief boom turned bust. Factories and stores shut, thousands of workers lost jobs, foreign companies and banks abandoned contracts that had already been negotiated,” reports The New York Times.
I am such a big fan of alternative energy that I regularly comment on it here and I host a news aggregation site for alternative energy, NeaReport. Note however, that what I support is alternative energy generated by free market suppliers as opposed to heavy government support. Spain’s story is an excellent example of why we need to keep government out of energy.
The Times reports that, “even inefficient, poorly designed plants could make a profit, and speculation in solar building permits was common……many of the hastily opened plants offered no hope of being cost-competitive with conventional power, being poorly designed or located where sunshine was inadequate, for example.” The profits were due to government subsides that were, as the opening paragraph explains, later cut. People were hurt. Resources and time were wasted.
“We lost the opportunity to be at the vanguard of renewables,” according to Joaquín Carlos Hermoso Murillo, Puertollano’s mayor
Things will turn out just great for Spain and solar power if the so-called experts prognostication’s turn out to be correct – this time. “The most robust Spanish solar companies survived the downturn, have restructured and are re-emerging as global players.” The Times does not tell us what happened to the workers and investors that lost jobs and money because of the government’s artificial boom. Nor does it describe the impact of the wasted financial resources and lost time due to the poor government planning.
Many alternative energy supporters want us to go down the same path as Spain, or, as New York Times columnist Thomas Friedman often says, put a “simple price on carbon.” These approaches mean more government getting in the way of energy development and interfering in markets – wasting resources and hurting people by using our tax money. Instead, the U.S. government should focus on removing barriers to alternative energy development and incentives that currently give carbon based producers financial and regulatory advantages, like tax breaks subsidizing foreign oil production. According to the Environmental Protection Agency, “In many cases, barriers to expanding renewable energy are regulatory and therefore within state control.” Follow the link for examples.
In simple words, I want the government to level the playing field by getting off the field.
Bring on the energy!
