Mr. President Please Think of Spain—The Iberian Solar Power Bust

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Solar power investor's new wardrobe

"[T]hink of what's happening in countries like Spain … where they're making real investments in renewable energy. They're surging ahead of us, poised to take the lead in these new industries," declared then-President-elect Barack Obama back in January 16, 2009.

Of course, any industry can "surge" if the government dumps enough taxpayer dollars into it. Now that Spain is slipping into a fiscal black hole, it turns out that solar power subsidies are unsustainable. This spring saw the bursting of Spain's solar power bubble. Climatewire is reporting:

Only two years ago, Spanish solar energy companies feasting on generous government subsidies expanded at a feverish pace, investing €18 billion (then worth roughly $28 billion) to blanket rooftops and fields with photovoltaic panels. They briefly turned the country into the top solar market in the world.

Spain's subsidies for solar were four to six times higher than those for wind. Prices charged for solar power were 12 times higher than those for fossil fuel electricity. Germany and Spain received about 75 percent of the world's photovoltaic panel installations that year.

Suddenly facing a deep recession, a collapsing housing market and a ballooning budget deficit, the Spanish government cut the rate paid for photovoltaic power by about 29 percent last year and put a limit on new solar installations at 500 megawatts per year. It is now considering additional tariff cuts that may reach as high as 40 percent and may even be applied retroactively, according to local newspaper reports.

Germany and France have also been pulling back on their ridiculously expensive solar subsidies. Of course, some American states and cities are just now enacting the same failed subsidies that Europe is quickly jettisoning.

And when the subsidies go, so, too, go the much-vaunted "green jobs" that depend on them. Climatewire reports that some 30,000 green jobs have evaporated in Spain. Earlier studies found that it cost nearly $750,000 to create each new green job in Spain's renewable energy sector.

So, yes, Mr. President. Please think about what's happening in countries like Spain.