Solar Crony Capitalism and Venture Socialism Decried by Washington Post

|

Investing taxpayer money

The Washington Post has a splendid op/ed in today's paper about the fiscal and business idiocy of government loan guarantees. Here are a few select passages: 

…the review process behind the Solyndra loan was not quite as diligent as Mr. Chu insists. The secretary claimed Thursday that the solar panel maker failed due to an unforeseen, and unforeseeable, "tsunami" of subsidized Chinese competition and low prices for its competitors' raw materials. In fact, the administration knew, or should have known, of these threats to Solyndra's business model before the loan closed in September 2009. The Office of Management and Budget warned about them in an Aug. 31, 2009, e-mail to President Obama's staff.

But the real scandal is the loan guarantee program itself (emphasis added). The United States needs alternatives to oil, for reasons ranging from climate change to national security. Shoveling taxpayer dollars into profit-seeking manufacturing companies is not the way to develop them.

You can call it crony capitalism or venture socialism — but by whatever name, the Energy Department's loan guarantee program privatizes profits and socializes losses (emphasis added). It's an especially risky approach in the alternative-energy space, where solar energy is many years from being cost-competitive with fossil fuels for most uses — and history is littered with failed government attempts to back the next big thing.

In his testimony yesterday, Energy Secretary Stephen Chu went on at length about Chinese competition in making solar panels, highlighting "the choice America faces when it comes to competing in the clean energy race and why we can and must play to win." The Post pointedly asks, Win what?

Mr. Chu raised the specter of Chinese dominance in photovoltaics, a market he estimated at $80 billion globally and growing by leaps and bounds. Of course, Solyndra's inability to survive without government funding casts doubt on this. Mr. Chu contradictorily noted that Solyndra failed in part because photovoltaic "demand has softened due to the global economic downturn and a decline in subsidies in countries including Spain, Italy and Germany." Given their current financial woes, we'd be surprised if Spain and Italy could afford to restore solar-electricity subsidies anytime soon. The U.S. Energy Information Agency, an office in Mr. Chu's department, noted in its most recent International Energy Outlook that, until 2035, "most renewable technologies other than hydroelectricity are not able to compete economically with fossil fuels .?.?. except in a few regions or in niche markets."

… we're also worried by the description of the department's loan portfolio in a 2010 internal OMB e-mail. "What's terrifying," one staffer wrote, "is that after looking at some of the ones that came next, this one [Solyndra] started to look better. Bad days are coming."

It takes government subsidies to build solar panels that then it takes more goverment subsides to install and operate them. It's losses all the say down. I guess Secretary Chu thinks we'll make up the losses on volume. 

Never mind the fiscal and commercial realities, Secretary Stephen Chu is flying off today to visit yet another solar panel manufacturing facility. This one is General Electric's plant in Arvada, Colorado. 

Advertisement

NEXT: The Bipartisan War on Liberty

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The secretary claimed Thursday that the solar panel maker failed due to an unforeseen, and unforeseeable, “tsunami” of subsidized Chinese competition and low prices for its competitors’ raw materials.

    Horseshit. Anyone who says that lower prices for any commodity are “unforeseeable” is an utter ass and should not be trusted with a passbook savings account.

    And I would be shocked if Solyndra’s offering documents, in the section on “Risk”, didn’t call out overseas competition as the biggest single risk to the enterprise.

    1. I guess the guy has never heard of Walmart.

      The “tsunami” has been hitting our shores for a couple of decades.

      1. Is that where they have the tractor pulls?

  2. the teeny-tiniest widdle obama

  3. The not-so-secret secret here is that the left doesn’t really want an alternative energy program.

    They want a blue collar employment program.

    If you wanted to maximize solar deployment in the US, just allow all homeowners and commercial property owners a 100% cost tax credit if they install solar.

    Within a year there would be more solar panels on houses than Dish TV receivers.

    But they won’t do that, because those property owners might buy imported components to install. The left doesn’t want solar power; they want domestically manufactured solar power.

    “Going green” is not as important as “giving unions the green”.

    1. Exactly. It was hard to make out Chu’s face the other day because it was covered with so much AFL-CIO pocket lint. Get a lint roller.

  4. Why does Reason hate Gaia?

  5. I guess Secretary Chu thinks we’ll make up the losses on volume.

    Chu doesn’t care about losses or profits. He’s a Concerned Citizen who just wants to make sure the people’s money gets spent on the right technology. Price signals are there to confuse the dumb public, which is why we need people like him to do the unpopular thing and force us down the path of green energy. How dare congress question his motives or authority!

  6. Funny…a guy named Chu blaming China. Only in America!

  7. We must not have a solar panel gap!

  8. “”””but by whatever name, the Energy Department’s loan guarantee program privatizes profits and socializes losses””‘

    Does this mean that the Washington Post will come out against the FED since it thinks it purpose in life is to privatize profits and socialize losses for the big banks.

  9. Once marcellus and utica shale gas gets really ramped up and reduces the demand for heating oil and petroleum prices go down, interest in solar panels will fall yet again, and all we’ll be stuck with are bad jokes and a big fat bill for the Obama administration’s follies.

  10. “The secretary claimed Thursday that the solar panel maker failed due to an unforeseen, and unforeseeable, “tsunami” of subsidized Chinese competition and low prices for its competitors’ raw materials.”

    So what?
    Even if it’s true, all it says is that Chu and the government in general have no business ‘investing’ taxpayer money.

    1. Right. If such a tsunami is so unforeseeable (ha ha), why should we trust the government to foresee it? Stolen concept, anyone?

  11. Michele Bachmann is obviously a fan of Reason:

    http://thinkprogress.org/green…..ilds-play/

Please to post comments

Comments are closed.