Europe Nixes Solar Power Subsidies

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Money for nothing?

The Washington Post is reporting today that many European countries are dramatically cutting solar subsidies to the solar power generation industry. Why? Because governments are going broke. As the Post explains

Across Europe, governments are slashing public spending to cut their deficits, and green-energy subsidies are a target, too, even as solar power accelerates in the United States, helped by sympathetic federal policies and an increase in subsidies that came as part of the federal stimulus program.

German policymakers indicated last week that they planned to cut once-generous subsidies as much as 29 percent by the end of the month, on top of a 15 percent cut in January, although some details were still being negotiated after protests from the solar industry. Britain and Italy have made similar moves, and in January, Spain abandoned its subsidies altogether, prompting outrage from the solar industry. …

"Everybody knows we can't go the way we've been going," said Miranda Schreurs, the director of the Environmental Policy Research Center at the Free University of Berlin and a government adviser. "It'll break the bank."

The Post notes that solar photovoltaic installations generate just a bit over 3 percent of Germany's electricity. How much do German consumers pay for the privilege of using electricity generated by subsidized solar power? 

The subsidies for renewable energy cost German consumers about $14 a month for a family of four. Companies that generate renewable energy get a guaranteed above-market rate for 20 years.

Just for comparison, the average price that a consumer pays for a kilowatt-hour of electricity in Germany is 36 cents. The Energy Information Administration reports that the average price in the U.S. is 9.8 cents per kilowatt-hour.

Of course, proponents of solar power claim that the subsidies produce lots of "green" jobs. The problem is that most studies say that the subsidized creation of green jobs results in the destruction of even more jobs in the rest of the economy. I cited a couple of studies in my February 2011 column, The Unseen Consequences of Green Jobs. One by a Stanford Unversity researcher concluded: 

"Electricity generation across all sources creates far fewer jobs than other activities in the economy; the estimates in the figure suggest that they range between 17-67 percent of the average job-creation in the economy," reports Huntington. "These net job losses mean that subsidies to either green or conventional sources will detract rather than expand the economy's job base, because they will shift investments from other sectors that will create more employment."

Another way to look at it is that in the worst cases, investing in solar power destroys seven jobs, wind eight jobs, biomass eight jobs, coal six jobs, and natural gas eight jobs, each compared to the 10 jobs generally created per million dollars of investment. All subsidies to the electric power sector divert money that would otherwise be invested in higher value wealth and job-creating activities.

Huntington concludes, "Policymakers and government agencies should look askance at the claimed additional job benefits from green energy." Gulen agrees, "Adding 'net' jobs cannot be defended as another benefit of investing in these [green] technologies."

For more background on just how economically delusional subsidizing green power as a way to create jobs is, take a look at a plethora of Reason articles on the topic. 

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  1. This impacts the entertainment value in a really bad way.

  2. Economic reality is just soooo unfair.

    Tony will probably just say that all we need is an Obama executive order.

    1. Clearly, the failure of government subsidies is that they weren’t LARGE enough.
      Therefore, Europe’s REALLY fucking up by not doubling down.

      Idiots.

    2. I think that Tony will actually welcome this, he will see this as a way for USA to become the world leader in solar panels.

  3. “Per section 149.26 of the Spanish Constitution “The State shall have exclusive competence over … the regime for the production, trading, holding and use of weapons””

    Countries with THIS in their constitutions are cutting it, and OUR federal government isn’t.

    Wow.

  4. For more background on just how economically delusional subsidizing green power as a way to create jobs is, take a look at a plethora of Reason articles on the topic just pay attention to everyday life.

    For the lazy. You’re welcome.

  5. Spain really has no choice in this matter, they really have no money to pay for their green fantasies nor will they find many willing lenders right now either.

  6. Yeah Solar power was really going to work in Northern Europe. To be a green is to be functionally retarded.

    1. STFU. The retardation comes from believing that finite resources are going to simply last forever, and so no major societal effort is needed to try and find a more sustainable alternative.

      Your kind will still be screaming that there must be oil reserves SOMEWHERE ten years after the last drop has been extracted.

      1. LOL. Last I looked solar was not a viable option for cars. And further, we are no danger of running out of coal or natural gas or uranium in my or my children’ children lifetime.

        If you think solar is a viable option in Northern Europe, you are retarded. And apparently not just retarded but proud of it.

        1. Nuclear cars, I like it.

          1. To be fair: The nuclear industry is as dependent on government as the solar industry is.

            1. Yup. Good old Coal is still the cheapest way to produce electricity and probably will be for a very long time.

              1. Coal powered cars, even cooler.

                1. They are called pug in hybrids Suki.

                  1. What to do Pugs have to do with it?

                    1. plug in Kinnath.

                    2. It was a great joke, you just wiffed the execution.

                  2. Little treadmills for little doggies?

                    1. Little treadmills for little doggies?

                      No. You attach a team of 20-40 pugs to the front of your Prius.

                      Mush!

                    2. I would pay money to see that….40 pugs pulling a Prius? I can see it rolling down the street at a mjestic pace, all the little doggies barking like mad, people on the sidewalk laughing so hard they pee their pants.

      2. “Your kind will still be screaming that there must be oil reserves SOMEWHERE ten years after the last drop has been extracted.”

        People are going to do nothing for 10 years after oil runs out? Really? Just going to sit there, with no energy source? And the only way to avoid that is to subsidize solar power?

        1. “People are going to do nothing for 10 years after oil runs out? Really? Just going to sit there, with no energy source?”

          They’ll be sitting in front of the TV watching a blank screen since Fox News isn’t on, with tears streaming down their faces, wondering why, oh, why didn’t they listen to that troll in 2012!
          The troll knows!

        2. Yes, people will just be sitting there, because “the market” won’t try to work on viable large-scale alternatives until it’s profitable – which means squeezing every last cent out of the resources we currently have.

          By the time energy costs finally push everyone over the edge, it won’t be profitable to research alternatives to market to the impoverished masses, broke from spending decades paying ever-escalating energy costs (not to mention what burning through that much coal could possibly do to the environment).

          Your answer to everything is “the market”. Well what if something is needed, but is not profitable? What happens then? We just go back to living in the Dark Ages?

          It doesn’t matter if it’s sustainable on it’s own right now or not; that’s what governments are for. By beginning the effort now, we can ensure that it IS sustainable by the time we really need it.

          1. Hey, a real brain-dead:
            “Not a GOP Shill|3.19.12 @ 12:21PM|#
            Yes, people will just be sitting there, because “the market” won’t try to work on viable large-scale alternatives until it’s profitable”

            No kidding! So Apple didn’t start a company until they were already selling i-things?
            How do they do that?

            1. If you think the amount of money and effort needed to work on sustainable energy for 6 1/2 billion people is in any way analogous to the start-up capital needed to work on home computers, then you are simply too stupid to continue having this conversation with.

              1. Not a GOP Shill|3.19.12 @ 12:33PM|#

                To be real clear, this wasn’t a conversation; I don’t converse with ignoramuses.
                I was laughing at you and just generally pointing out your stupidity.

                1. I notice you don’t try to counter the point. I suppose you just want to let it stand that you believe building a computer in a garage = generating sustainable energy for the entire earth.

                  1. Do you understand that one person, one company, won’t have to come up with one solution for the entire earth? People should be free to try alternatives, and invest in companies that they think have good ideas for alternatives. Some will fail, some will succeed, but the track record of government investments is far worse than that of the free market.

                    1. People should be free to try alternatives, and invest in companies that they think have good ideas for alternatives.

                      BLASPHEMY!!11oneoneone

              2. Re: Not a GOP Schill,

                If you think the amount of money and effort needed to work on sustainable energy for 6 1/2 billion people is in any way analogous to the start-up capital needed to work on home computers, then you are simply too stupid to continue having this conversation with.

                If you think that throwing money into something will turn it magically profitable, you’re too stupid to continue having ANY conversation.

                1. I specifically said that it isn’t profitable right now; it might be at some point in the future, with proper investment now, but that is decades away, at the very least.

                  The point was, some things need to be done even if they AREN’T profitable, which is why the market is not the solution.

                  1. Re: Not a GOP Shill,

                    I specifically said that it isn’t profitable right now; it might be at some point in the future

                    Then at some point in the future you invest in it.

                    The point was, some things need to be done even if they AREN’T profitable, which is why the market is not the solution.

                    That’s not the conclusion. If something is not profitable, it means it is NOT CREATING MORR VALUE THAN ITS COST. In other words: You’re WASTING RESOURCES. You cannot simply shoo economics away expecting a different result, NAGS.

                  2. The point was, some things need to be done even if they AREN’T profitable, which is why the market is not the solution.

                    I see you have absolutely zero understanding of what a price signal is.

                    1. Yes, people will just be sitting there, because “the market” won’t try to work on viable large-scale alternatives until it’s profitable

                      What!? I haven’t been driving an internal combustion engine powered device, fueled by a relatively inexpensive and plentiful petroleum product all this time? And collectively, we haven’t been doing this for over 100 years?

                      Why doesn’t anyone tell me these things?

          2. Re: Not a GOP Shill,

            Yes, people will just be sitting there, because “the market” won’t try to work on viable large-scale alternatives until it’s profitable[…]

            Which should tell you that “the market” is not insane like your good friend Barrack there.

            1. When the ship goes down the rats swim away, except for the blind ones who just keep chewing.

              Hilarious. With reports like this and the failures of several subsidized companies that burned through and destroyed capital, there are still idiots like Not a GOP Shill who think they can just keep crapping out lies to sustain their green totalitarian fantasy of beating the market.

              You are good for a laugh or two and your anger is truly yummy.

          3. Not a GOP Shill is also not to familiar with basic physics.

            By beginning the effort now, we can ensure that it IS sustainable by the time we really need it.

            If it was the 1800’s Not a GOP Shill would be advocating dumping money into perpetual motion machine research to insure “that it IS sustainable by the time we really need it”.

      3. In case you did not read the article, the green subsidies in Europe are in no way sustainable.

      4. Re: Not a GOP Shill,

        The retardation comes from believing that finite resources are going to simply last forever,

        The retardation comes from believing that finite resources will be considered “resources” forever despite people’s subjective valuation.

        and so no major societal effort is needed to try and find a more sustainable alternative.

        Like the Egyptians did with Pyramid power – oh, that societal effort!

      5. I’m gonna save you some research and head scratching. You see, Northern Europe’s climate is much like that of Seattle’s: Cool, Rainy, and not a lot of sunlight.

        Therefore thinking that solar panels would work, in a cloudy, rainy climate, is functionally retarded.

  7. The Washington Post is reporting today that many European countries are dramatically cutting solar subsidies to the solar power generation industry. Why? Because governments are going broke.

    But but, what about the multipliers? These green investments should be more than paying for themselves.

    1. As somebody else pointed out here once, technically zero is a multiplier.

        1. and fractions.

  8. We’ll see how long this lasts. The small liberal party (which had the larger part in slashing the subsidies) of the German governing coalition is going the way of the Dodo right now. So the only thing is pretty sure: after the election 2013 we’ll have some kind of governing coalition that probably will be less critical of green subsidies than we have now. Woe is us.

    1. I say let the Greens become the dominant party, they will throw money like nothing as Greece, welfare, solar etc. In no time the FPD will get the 5% threshold back.

      1. Not if they continue to be the spineless cowards they are.

        1. I don’t think they are spineless, the reality is that voters do not like the hear the unmentionable, cutting back on welfare and lower taxes, thus they lost votes.

          1. Another reason they lost votes: They didn’t cut back on welfare and didn’t lower taxes (except for a few special interests).

            1. True. How many times do we have to hear the story of the pro-free market party compromising for ‘maturity’ before assholes like David Frum shut up? I guess infinity.

            2. They also bowed before the Greek bailout.

              1. Sadly they did. But at least the pretty strong inner-party resistance showed that there are still some liberals left in there. Doesn’t give me hope for the near future but yeah… grasping at straws is the only thing left for organized (or even unorganized) liberalism in Germany right now. Damn.

  9. I think the tack Tony will adopt now is to accuse us of being inconsistent for wanting to be like Europe.

  10. Isn’t Europe powered almost entirely by dreams? (And atom-splitting?)

    1. Unicorn farts and pixie dust.

  11. …each compared to the 10 jobs generally created per million dollars of investment.

    This still seems like a pretty bad investment unless those jobs pay at least six figures.

    1. I am sure some of them do. The money has to go somewhere. But I doubt the “jobs” are for doing anything productive beyond figuring out new and more creative ways to steal.

      1. Those “jobs” are probably executive positions whose only function is to figure out how to further fleece the public treasury.

  12. even as solar power accelerates in the United States, helped by sympathetic federal policies and an increase in subsidies that came as part of the federal stimulus program.

    Nice capework, waPo.

  13. many European countries are dramatically cutting solar subsidies to the solar power generation industry. Why? Because governments are going broke.

    Let me be clear.

    Pussies.

  14. after the election 2013 we’ll have some kind of governing coalition that probably will be less critical of green subsidies than we have now. Woe is us.

    You’ll still be subsidizing all those Greeks banks. That’s expensive.

  15. Good old Coal is still the cheapest way to produce electricity and probably will be for a very long time.

    But teh POLAR BEARZ!!!

    1. LOL. I was watching that I Phone commercial the other day, the one where the hipsters drive from New York to Santa Cruz in the middle of the winter. What exactly is the carbon footprint of driving a 20 year old Volvo cross country?

      1. That Volvo runs on bio-diesel.

        I mean, as far as you know it does.

        1. Didn’t Randy Marsh show that they run on the farts of smug assholes?

  16. Small-Town Solar Revolution Has Created Jobs Galore & Driven Down Price of Power in Germany
    http://cleantechnica.com/2012/…..ntechnica+(CleanTechnica)

    1. If any of that is true, and it is not but let’s say it is, then they don’t need subsidies. If solar is so wonderful, the whole world will use it on its own. The government doesn’t have to subsidize good ideas.

      1. But then how can governments take credit for being the saviors of society?

    2. Re: Nando,
      You should read your links more carefully:

      Solar: Bringing Down Power Prices (or Keeping Them from Going Up Too Fast)[sic]

      While residential power prices in Germany have gone up in recent years, as solar and wind power have replaced nuclear and coal, there are some obvious reason for that. Most notably, perhaps, is the fact that new power sources are more expensive than existing power sources. No matter what option you use today, a new power plant is going to increase the price of electricity.[sic]

      Clearly the author does not understand the simple concept of SUPPLY and demand. If a new plant is built to SUPPLY more energy, then the energy cost should go DOWN, not UP.

      1. The new plant is built to supply sustainable energy, not cheap polluting energy. There’s initial costs involved in that.

        1. And those ‘initial’ costs are why it fails, amongst other reasons.

        2. Re: Nando,

          The new plant is built to supply sustainable energy, not cheap polluting energy.

          But you’re now contradicting your own link. You touted it as a COST-CUTTING marvel just a couple of posts ago. NOW you’re saying that is not. So which one is it, Nando?

          There’s initial costs involved in that.

          So what? Why should the German people fork over to pay for those costs? You’re an ignoramus, Nando. Increased capacity is build to meet DEMAND, not to raise the price! Companies know this all too well.

        3. Additionally, since our societies are still quite unable to adequately price the full cost of nuclear and fossil fuels

          The economics-ignorant author is alluding to “externalities”

          (or, inversely, the true value of solar),

          As if solar panels did not create “externalities.” Clearly, the author of the article is making moral judgments on the different origins of energy and construing them as economic value in order to cover over the rising prices of energy in Germany.

          The other factor that Nando here and the highly-touted article fail to take into account is the cost of the subsidies on the overall price of energy. Just because it looks like you’re paying less at the meter does not mean your cost is less, considering you’re still being robbed to pay for those subsidies.

    3. Site should be renamed “Clean Lies”.

  17. Solar Power station in Spain works at night!
    http://news.yahoo.com/solar-po…..lyHappened

    1. Good for them. So they shouldn’t miss the subsidy.

    2. the day when the business has repaid that money to the banks (in 18 years, he estimates), this station will become a 1,000-euro note printing machine!

      Really? An 18 year payback? I’d get thrown out of the room if I proposed a capital project with a 10 year payback, much less 18. I don’t even know what to say to this. Who the fuck greenlit this, morons?

      1. The MTBF of solar technology is substantially less than 18 years.

        1. So the break even is past MTBF. Even better, kinnath. I’d probably get fired for trying to pass that bullshit off. I’m supposed to know better.

          1. As well you should. “This project stands a 100% chance of losing money. Unless the government goes bankrupt before we do.” Which ain’t a bad bet in Spain in 2012.

  18. Some environmentalists say the decision is more political than economic.

    “It is true there is a problem, the amount of money being put into the solar industry is high,” Cornelia Ziehm at the Deutsche Umwelthilfe (German Environmental Aid) in Berlin said. “But more than this, in this time of crisis the German minister of economy Roesler was in need of a new theme to tackle. He discovered the subsidies for solar energy were quite high so he proposed to cut them as a means to reduce costs for the German citizens.”

    Read more: http://www.upi.com/Science_New…..z1pa4Kd3BY

    1. “This decision will kill the market for solar energy,” Stefan Hief, chief executive officer of Cosmoenergy, manufacturer of photovoltaic cells, said. “If there have to be cuts, they should not be as drastic as the government is proposing. This way, we are going to lose thousands of jobs in the sector, at a time when we are the world leaders in solar power production and the German public is in favor of renewables.

      Read more: http://www.upi.com/Science_New…..z1pa4PdFzR

      1. “This decision will kill the market for solar energy”

        If the market needs subsidizing, there is no market.

    2. Re: Nando,

      Some environmentalists say the decision is more political than economic.

      Some environmentalists are environmentalists because they’re NOT economists.

    3. Some environmentalists say the decision is more political than economic.

      Since the decision to start subsidizing solar was more political than economic, it seems only fitting that the decision to stop subsidizing solar should be more political than economic, as well.

  19. […] many European countries are dramatically cutting solar subsidies to the solar power generation industry. Why? Because governments are going broke.

    Which means they’re not making any money from their “investments.” Doesn’t that tell you something?

  20. What does ‘green energy’ have to do with using less oil.Most oil is used fo transpotation,chemicals,ect.Even if someone found n new sourse to produce electricty we’d still us tons of oil.Solar and wind does not replace oil.It’s another sector all togeather.

    1. Re: Michael Pack,

      Solar and wind does not replace oil.

      But Solar and Wind do represent great opportunities for the politically well-connected rent-seeker.

  21. He discovered the subsidies for solar energy were quite high so he proposed to cut them as a means to reduce costs for the German citizens.

    Making him what, exactly? The very personification of evil?

    It would be nice if an American politician would take the cost to taxpayers into account when analyzing a government program.

  22. Solar PV soon to be the cheapest source of power,’ says Kees Van Der Leun

    Contrary to what some believe, competition on the German PV-market has always been fierce, which of course is a driving factor behind the ensuing cost (and price) reductions.
    http://www.2050publications.co…../#more-469

    1. Sooo……that means they don’t need subsidies! Hooray!

      Right?

    2. Yep. Breakeven solar power is 20 years away, just like 20 years ago.

    3. Re: Nando,

      Contrary to what some believe, competition on the German PV-market has always been fierce, which of course is a driving factor behind the ensuing cost (and price) reductions.

      WHAT cost reductions? You just posted above that there were NO cost reductions. Not only that, the LINK you posted says that there are NO cost reductions, instead Germans have suffered a cost INCREASE which YOU blamed on “initial costs.”

      You cannot have it both ways, Nando. It looks like you have NO handle at all on the subjects about which you post, i.e. economics and energy.

      1. Why are you shouting?
        The article says: “German solar power has reduced the price of power on the EPEX Power Exchange”

        1. Re: Nando,

          German solar power has reduced the price of power on the EPEX Power Exchange

          And the same article says that it didn’t, here: “While residential power prices in Germany have gone up in recent years, as solar and wind power have replaced nuclear and coal”

          It also comes up with this economics-ignorant pearl: “No matter what option you use today, a new power plant is going to increase the price of electricity.” This is NOT TRUE – increased capacity is built to meet demand, not to increase the price. The ONLY reason prices have gone up for the average German (and they have, no question about it) is because of the inherent energy conversion inefficiency of Solar, which cannot be avoided as it is a matter of Physics.

          And I am not SHOUTING, I am giving emphasis to some key words.

        2. The article says: “German solar power has reduced the price of power on the EPEX Power Exchange”

          Heavily subsidized industries shift costs to taxpayers, allowing the apparent cost of the goods/services to appear lower.

          See, also, Chevy Volt.

        3. Well, you’ve got to thank the rise in my electricity bill for that.

      2. It’s “funny” how often that happens, eh?

  23. hey Apple: You’d think if you had $98 billion dollars, you could pay your sweatshop labourers a living wage?

    1. Re: Nando,

      hey Apple: You’d think if you had $98 billion dollars, you could pay your sweatshop labourers a living wage?

      What’s a “living wage”?

      1. A theoretical wage level that allows the earner to afford adequate shelter, food and the other necessities of life. The living wage should be substantial enough to ensure that no more than 30% of it needs to be spent on housing. The goal of the living wage is to allow employees to earn enough income for a satisfactory standard of living.
        If employees are more satisfied earning a living wage, there will be less employment turnover. This reduces expensive recruitment and training costs for the firm. They also argue that the higher wage will boost morale. Employees with high morale are expected to have higher productivity, allowing the company to benefit from increased worker output.

        1. Wow, Nando. Its amazing that all those companies haven’t figured out the economics of paying above market for their workers is actually profitable in the long run.

          I thought this was particularly choice:

          The living wage should be substantial enough to ensure that no more than 30% of it needs to be spent on housing.

          What kind of housing? McMansions?

          The goal of the living wage is to allow employees to earn enough income for a satisfactory standard of living.

          Satisfactory to whom, exactly?

        2. Ok. Why don’t you start a company to compete with Apple, paying every single employee a wage that corresponds to this definition, and only working with subsidiaries or contractors that adhere to the “Living wage” rule? Surely it would be more successful than those short-sighted fools at Apple, according to your standard-talking-point screed here, right?

        3. Re: Nando,

          A theoretical wage level that allows the earner to afford adequate shelter, food and the other necessities of life.

          That sounds like a bullshit concept. I can perfectly make the minimum wage (for instance) a “living wage” if I cut my costs and lower the bar of what I think my living standard should be. But I don’t think that is what YOU believe the “living wage” should be, rather it being whatever strikes your fancy.

          The only objective concept is the wage which is the price of labor as agreed by both employer and employee (or “buyer” and “seller”). Any other connotation is nothing more than mere moralizing from someone not familiar with economics.

          1. You can make $7.25/hour work?
            Please show your budget.

            1. Wow. Way to ignore the tough questions and seize on the miniscule detail.

            2. Easy. Peasy.

              $7.25/hour, less withholding, works out to, call it $6.25/hour. If I work one 2,000 hour/year job, that’s $12,500/year. I’ll also moonlight, whatever, another 500 hours a year, so my total take-home is, call it $15,000/year.

              Because I haven’t made the lifestyle choice to live in an expensive urban center, my housing costs are $400/month. Because I haven’t made the lifestyle choice of eating out much, my food costs are $400/month, and I am not scrimping at all on that budget. So, food and shelter are out of the way for $10,000/year. I take the bus to get around, or borrow a car when I need to, so transportation is a whole $50/month bus pass.

              That leaves be about $400 – $500/month for clothing, entertainment, etc.

        4. A theoretical wage level that allows the earner to afford adequate shelter, food and the other necessities of life.

          That would work … for people living in a theoretical world.

      2. Living wage = latin for ‘mendacious bullshit’

  24. Man, pretty soon the only “better than America” examples for liberals will be the Scandinavian countries.

    1. Hey, don’t forget about us!

      1. No, no. I declared our country free! Come to Caba, the heavens are highs, and though the emperor may be near but he is stoned off his ass!

  25. subsidies that came as part of the federal stimulus dollar devaluation program.

    ftfy.

  26. I’ve fallen in love with Almond Coconut Milk.
    Go to hell, cows milk!

  27. Our newest bozo will never find this, but hey!
    Not a GOP Shill|3.19.12 @ 12:40PM|#
    “I notice you don’t try to counter the point. I suppose you just want to let it stand that you believe building a computer in a garage = generating sustainable energy for the entire earth.”

    First it was ‘no one makes anything until they’re assured of a profit.’
    Now the strawman is ‘you have to provide energy for the planet all at one time!’
    No wonder the dunderhead doesn’t get much ‘conversation’.

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