If you know the government is going to subsidize your business, you are a lot more agreeable to starting a company with questionable prospects than if you have to compete in the free market. If government subsidies decline, you are in real trouble if you have not shown your business model works.
That is the plight of alternative energy like solar and wind and ethanol today. Though pundits have insisted their economic models show it works, you can't spend virtual money. Financial reality is that without subsidies funded by governments who force conventional users to pay for those $25,000 solar installations, the industry will collapse. Governments can't tax economic models. They can't tax an expense.
The lockdown due to the coronavirus pandemic has been cheered by activists. They are thrilled that consumption for jet fuel has declined by 50 percent and gasoline by 30 percent. They tout "virtual" lives saved, as if they can show 200 more people did not die due to airlines effectively being out of business.
While 'lives saved or gained' is a bogus metric, employment is not. And employment looks bad. When tens of millions of people just in the U.S. are unemployed, idealism about arbitrary environmental targets leave the conversation.
Like organic food and natural chemicals, alternative energy is a values issue for those who can afford it. Yet when necessity hits home, people run to Costco for meat and stock up on Lysol and Purell, not $16 a dozen eggs and Seventh Generation whatever. When money is tight people need affordable energy because it is a basic necessity and a strategic resource. Lower emissions, while cheered by people who rarely produce anything of value, are actually sign of a lagging economy. They plummeted during the 2009 recession also.
Environmentalists at Yale, MIT, and Northwestern are worried about a decline in alternative energy jobs when they should be worried about jobs that don't require subsidies - the ones that pay for alternative energy subsidies. Because when Yale has to start using its $30 billion for more than investing in energy stocks, it will mean parents can't afford the tuition and there will be a lot less need for Yale environmentalists to groom them for careers in activism.
There has been no meaningful change in solar technology in 50 years despite $200 billion in direct subsidies - that's just in the U.S. - and high pass-through costs for poor people and those that don't own a home so that solar energy users can 'sell energy back to the utility at the same rate the utility charges', except with no power lines to maintain or employees to handle problems. It's obviously a money-losing proposition and that is why government told utilities to pass through the costs to regular customers. Who will be poorer or live in apartments.
The reason solar and wind are no better than in the past is because we have subsidized businesses rather than investing in basis research. Rather than accepting that after 11 years of gigantic subsidies, the technology is not ready, the authors of the new paper want government to double down; they want a special government stimulus spending plan for an industry that is already entirely reliant on government money. It would be like teachers asking for government money to hire more teachers when fewer kids are in school.
The economic stimulus of 2009 overwhelmingly went to government union employees rather than the parts of the economy that needed it. Government event spent $25,000 in the 'cash for clunkers' program so people could replace cars they were going to replace anyway.
The clunker in this case is solar and wind power. We were told if we primed the pump this industry would take off on its own. Yet according to the authors 600,000 "green energy" jobs are gone because government won't increase subsidies and people don't want to buy an energy placebo during a pandemic. Instead of being the viable business we were sold last year and for 10 years prior to that, solar and wind lost 600,000 jobs the moment the economy slowed?
If the industry perpetually needs a dollar from government in order to generate 50 cents, that is not an energy program, it's an IQ test.
Coronavirus Has Shown Alternative Energy Is Luxury Spending, Not Part Of A Realistic Strategy
By Hank Campbell | June 23rd 2020 10:28 AM | Print | E-mail
- Is Subsidized Solar Power A Bargain For New Jersey And Pennsylvania?
- The World Has Spent $2.6 Trillion On Solar And Wind Power Subsidies- And Gotten Little Energy
- Solar Power Customers Will Have To Start Paying- And That's A Good Thing For Green Energy
- Outsourcing Alternative Energy To The Developing World
- President Obama Is Getting Huge Propane Backup For When Solar Power Creates Brownouts In Martha's Vineyard