It’s not every day that the New York Times makes a compelling case against government giveaways. But a recent page-one article underscored that the Solyndra scandal was only the tip of the solar-subsidy iceberg. Huge companies like Goldman Sachs, Morgan Stanley, General Electric, utilities including Exelon and NRG, and even Google are receiving government guarantees that ensure large profits with virtually no risk — except to the taxpayer.
The Times ascribes to the Obama administration a “gold-rush mentality” when Congress expanded green-power incentives in 2009, despite a paralyzing federal deficit. The chief executive of NRG, which received $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for solar projects, gushed that “I have never seen anything . . . in my 20 years in the power industry that involved less risk than these projects.”
A start-up industry with no capital risk to investors? It’s a nifty deal if you can get it—and many have. “It is like building a hotel, where you know in advance you are going to have 100 percent room occupancy for 25 years,” the Times quotes the CEO of SolarReserve. Even some of President Obama’s top advisors have warned of industry “double-dipping.”
Solar may be the most-subsidized industry in American history. Not only are producers subsidized at the federal, state, and sometimes even local levels, but consumers are subsidized to purchase solar panels, utility companies are forced to use and further subsidize solar power, and higher utility rates are passed along to Americans amidst deep recession.
Arizona is immersed in solar subsidies, providing tax breaks and (through the Corporation Commission) mandating that 15 percent of all utility energy be provided through specified renewable sources. Cost and technological feasibility are no object, and every dollar in added costs is passed along to consumers through a utility surcharge.
If the New York Times gets it, shouldn’t sensible, self-styled conservative elected officials? It’s time for government to stop playing Santa Claus to this pampered industry.
New York Times: “A Gold Rush of Subsidies in Clean Energy Search”