Another Obama Administration Attempt at Solar Power Central Planning Goes Bust

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Another effort to burn taxpayer dollars to produce power fails

Solar Trust of America which aimed to build a solar power plant in the California desert using parabolic mirrors has filed for bankruptcy. Reuters reports:

Solar Trust of America LLC, which holds the development rights for the world's largest solar power project, on Monday filed for bankruptcy protection after its majority owner began insolvency proceedings in Germany.

The Oakland-based company has held rights for the 1,000-megawatt Blythe Solar Power Project in the Southern California desert, which last April won $2.1 billion of conditional loan guarantees from the U.S. Department of Energy. It is unclear how the bankruptcy will affect that project…

Solar Trust of America and several affiliates filed for protection from creditors with the U.S. bankruptcy court in Delaware. It estimated to have as much as $10 million of assets, and between $50 million and $100 million of liabilities.

The U.S. Department of Energy press release last April announcing the loan guarantee stated:

U.S. Energy Secretary Steven Chu today announced the offer of a conditional commitment for a $2.1 billion loan guarantee to support Units 1 and 2 of the Blythe Solar Power Project, sponsored by Solar Trust of America, LLC. The concentrating solar thermal power plant includes two units comprising a combined 484 megawatt (MW) generating capacity, an eight-mile transmission line and associated infrastructure. The project will be built adjacent to the City of Blythe in Riverside County, California and is expected to create over 1,000 construction jobs and approximately 80 operations jobs. The plant is estimated to avoid over 710,000 tons of carbon dioxide emissions annually, equivalent to the annual greenhouse gas emissions from over 123,000 vehicles.

"Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale," said Secretary Chu. "Continued investments like this project make solar power more efficient and cost competitive while creating thousands of jobs and strengthening the economy."

The invaluable Powerline blog notes that there appears to be good news for taxpayers—the company did not take any of the $2.1 billion in federal loan guarantees offered it by the Obama administration. Apparently Solar Trust executives concluded that cheap Chinese photovoltaic panels made their project even more uneconomic and declined to take the federal money. As Jeff Hinderaker at Powerline wryly observes:

So the Obama administration's proposed loan guarantee was so dumb that the prospective borrower decided not to take it! That tells you all you need to know about the Obama administration's ability–actually, the ability of any administration–to execute an industrial policy that doesn't fleece the taxpayers.

One would have hoped that even the dimmest politicians and policymakers could understand by now just how brilliantly well central planning worked in the old Soviet Union. No such hope and no such change. 

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123 responses to “Another Obama Administration Attempt at Solar Power Central Planning Goes Bust

  1. Another one bites the dust!
    Another one bites the dust!

    And another one, and another one,
    and another one bites the dust!

  2. The solar constant is 95 watts per square foot at sea level at the equator at solar noon. Half the time the sun isn’t up and there are those pesky things called clouds, and the damn earth keeps turning. The panels are expensive and full of nasty compounds.
    What’s the upside to solar again?

    1. What’s the upside to solar again?

      It’s innovative!

      You know… innovative!

      1. Friends of the administration are the ones who run solar companies.

    2. Campaign contribution bundling.

    3. It keeps the rent-seekers in cognac and hookers.

    4. Well, there is promise for an array of solar panels that orbit earth so that they’re always generating power; the problem is transmitting that power to Earth.

      Solar is promising, just not until we can get to space often enough to harness more of the Sun’s energy.

    5. 95 watts per square foot

      SUCK IT, METERS!

    6. the sun is green.

    7. Lots of opportunity for rent seeker to get in on the scam. Seriously, have you seen the amount of money being wasted?

  3. “Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale,” said Secretary Chu.”

    “If we throw enough money at it, we’ll get jetpacks!”
    “Jetpacks, Red?”
    “We were promised jetpacks, Kitty!”

    1. George Jetson had a flying car that folded into a briefcase, for fuck’s sake. The Prophets Hanna and Barbera foretold it decades ago.

      I am disappoint.

    2. “We were promised jetpacks” is a pretty solid band from Denver. Just puttin it out there.

  4. Solar isn’t a bad idea and already has a market. It and other alternatives will continue to improve and become more viable as gas prices rise.

    In other words, the government doesn’t have to get involved. Nor should it.

    1. Except that the government is involved in subsidizing ethanol, natural gas, crude oil, coal, gasoline and many other types of energy production.

      The playing field has been made unequal by government support for carbon fuel, and it is unreasonable to expect small businesses to be able to crack into an un-level energy market without similar support.

      I would expect a site like REASON (not saying you specifically, Pro Libertate) to take less glee in the failure of businesses receiving the support and instead advocate for removing all support for energy production.

      1. All the ethanol subsidy does is make gasoline less efficient and increase the price per mile to drive, plus it increases the price per calorie of food for any product using corn.

        1. The ethanol mandate also means I have to schlep out to the marina to fill up my generator, chainsaw, lawn mower, etc. Ethanol fucks up a 2-stroke quick as a wink.

      2. Da-rink!

        1. the drinks were better when Postrel was bartender.

      3. Except that the government is involved in subsidizing ethanol, natural gas, crude oil, coal, gasoline and many other types of energy production.

        Edited for accuracy. You’re welcome.

        1. Thank you. Some of these industries enjoy some tax breaks, but a tax break is not a subsidy, no matter how often the left says it is.

          1. The only special “tax break” that I am aware of for the oil and gas (and perhaps coal) industries that I know of is an accelerated depreciation credit.

            1. Many businesses get depreciaton credits, so the only “fair” solution would be to get rid of them entirely, for EVERY business.

              Funny how Team Blue doesn’t use that argument.

              1. Many businesses get depreciaton credits, so the only “fair” solution would be to get rid of them entirely, for EVERY business.

                I’ve run into many of TEAM BLUE that can’t even grasp at this concept.

        2. Subsidies, tax breaks… It’s all one to the bottom line. And what about manipulating oil/gasoline prices with our military over there? Another indirect “subsidy”. And what about all the fuel it takes to fight a war? A nice bump in sales for the oil companies, no?

      4. My objection is to all of the subsidies in the first place. I have a lesser objection to pure research funding, though, of course, I do object to that as well.

        If I were a statist looking for green alternatives, I’d double down on fusion. We’ll eventually crack that nut, and it’s a win-win-win.

        1. Solar Power Satelites are a better bet.

          Gather the Sunlight up in space where it is undiminished by the atmosphere, always shining and there are no clouds, convert it to microwaves which pass right through the air as if it weren’t there, then run some cheap metal filaments through a grid to collect the power.

          Sure the initial investment cost is high but with Space X and Orbital Sciences and a few others coming on line with private commercial launch systems access to space should start becoming affordable real soon and the beauty is there is no new science or technology which needs to be invented to make it work, it’s all off the shelf and only the engineering process of building a kilometer wide platform in space needs to be worked out.

          1. convert it to microwaves which pass right through the air as if it weren’t there, then run some cheap metal filaments through a grid to collect the power.

            No way; a gigantic microwave emitter in space would fuck up a lot of electronic devices currently in use. I was thinking a space laser with a thorium powerplant on earth.

            1. Only if it were pointed directly at a city. If on the other hand you point it at some uninhabited space just outside of the city where there are no electronics, problem solved.

              1. divergence. even with a well collimated laser/maser, how large is the beamspot gonna be by the time it gets to earth?

                1. As large as the military needs it to be. Dual purpose.

                2. Given that we have the ability to shine a laser at a reflector on the moon an detect the reflection back on earth, a round trip of half a million miles with 2 trips through the atmosphere I don’t think there is much risk of the beam diverging terribly much on a mere 24000 mile trip with 1 pass through the atmosphere.

                  Also you’ll want the beam area to be around a sq KM in size to keep the temp in your antenna array down to managable levels. Last thing you want to have to do is use up your power keeping the damn things cool.

                  I know a sq KM sounds large but given that you could easily rig the antenna array above a cornfield with impact on the corn (the EM flux would be nowhere near enough to create popcorn or harm the plants in any way) would be non existant it is not so hard a task to accomplish.

        2. If I were a statist looking for green alternatives, I’d double down on fission.

          ftfy; fusion is still at least a decade away from being remotely viable.

          1. For some reason it has been “at least a decade away” for decades.

            1. The reason for this is simple.

              Fusion may never be able to be tapped as an energy source because it requires a constant input of energy to sustain the fusion. With a Star you have the energy of gravity pulling the nuclei into a dense enough packet for fusion to happen, with a reactor you need to create that for yourself.

              With Fission on the other hand the problem is the opposite once you trigger it you need to keep it from running away in an uncontroled chain reaction and one of the best ways to do that is to convert the excess energy to heat which can then drive steam engines

          2. It’s at least twenty years away, not ten. That’s the story, anyway.

            I think we actually might crack that nut before too long, but commercial viability is a long way from proof of concept.

            1. Also: Nuclear Fission is the safest form of mass-power production. Not one of the safest; THE safest.

              1. Note that this includes Wind, Solar, and other “green” energies.

      5. Re: NAL,

        Except that the government is involved in subsidizing ethanol, natural gas [sic], crude oil[sic], coal[sic], gasoline[sic] and many other types of energy production [you mean… nuclear?].

        Please show evidence of direct subsidies from the government to the natural gas, coal and petroleum industry. Oh, and don’t bother mntioning “tax breaks,” please: Thieving less from victims is NOT “subsidizing” victims of thievery.

      6. NAR: Actually, the elimination of all subsidies is a consistent point made repeatedly at Reason. Just google around a bit.

        1. I’m pretty sure NAR is referring to the untaxed exhaust of CO2 from fossil fuel burning as the subsidy in his/her comment.

          I’d like to see Rasilo’s solar power sats in my lifetime. The problem is that you have to get launch to LEO costs down to the tens of dollars per kilogram in order for it to be economically viable. Plus, the engineering processes of building and maintaining a giant platform in earth orbit will not be trivial to develop. It would serve as a great impetus to developing a Moon base, however.

  5. Since the beginning of time man has yearned to destroy the sun.

    1. “I require the solace of the shadows and the dark of the night. Sunshine is my destroyer. “

  6. Passive solar design in my new house cut my heating bills in half.

    Solar electric generation is only useful for niche applications when connecting to the grid is not practical or economical.

    1. That’s simply not true. Many homes have been able to pay for their solar systems within a decade and enjoyed essentially free power afterwards.

      And that’s with older, more expensive solar cells. It will be even more effective with new technologies and reduced prices.

      1. Links, please. I have yet to see any designs in which the ROI was positive.

        1. All the studies I have seen say that pay off is after MTBF. You start to replace the panels before you have the whole system paid off.

      2. Are you talking subsidies? If yes, then you’re making my point for me. Cause as far as I can tell, solar doesn’t pay off before MTBF without subsidies.

      3. Many homes have been able to pay for their solar systems within a decade

        Ahahahahahahahahahahhaha

        What are you smoking?

        You do realize that solar systems require maintenance, right?

        As a side note, there is great solar tech that’s been available for decades. It’s called a skylight.

        1. also, after a decade, those PV cells are at what, 50% of design output?

          1. Not to mention the cost of replacing whatever medium you use to store the energy generated by the panels.

      4. Many homes have been able to pay for their solar systems within a decade and enjoyed essentially free power afterwards.

        Bull. Shit.

        In my application, I would have shelled out over $150k in cells, only to have the ability to generate 30-40% of my energy needs.

        I would NEVER have come close to paying for the cells.

        Solar is nothing more than a feel-good alternative except is small niche applications, like a solar water heater or pool heater (in southern climes where you never have to heat a pool that much).

    2. Stately Dean Manor, to be perched high in the Sangre de Cristos outside Santa Fe, will be passive solar.

      It will also likely have solar heating (rooftop solar heating for the sub-floor radiant heat).

      The ROI on both of those should be excellent.

      It may even have solar electricity, because there are no power lines to the site, and running them in will likely cost about the same as a full photo-voltaic array.

      1. Excellent plan.

        But I thought you were relocating abroad.

        1. Nah. We scoped out Panama, but Mrs. Dean was not sufficiently enthralled.

          The deal with Central America is that you can either live in an expat compound, in which case, what’s the point, or you can live in the middle of what is still mostly a third world country. You have to be pretty committed to do the latter, especially when the alternative is Santa Fe and the Sangre de Cristo Mountains.

          Sure, its cheaper to live in Panama, but that just means R C needs to put more money in the bank. And what Mrs. Dean wants, R C provides.

          1. I know Singapore has strict drug laws, but have you scoped them out for their economic freedom?

            1. Mrs. Dean has an aversion to hot, muggy climates.

              One that R C shares.

              This move will be, if not complete retirement, at least a robust semi-retirement. So I won’t be needing much in the way of economic freedom. Not to mention that may income is based on my membership in a rent-seeking guild that will not export very well, at all.

              1. You’re a CPA?

                1. Law is not the most mobile of professions either. Most of the common-law jurisdictions are much less economically and socially free than the U.S. And if muggy climes are out, then bye-bye to St. Kitts, Domenica, etc…

  7. Oh, good lord. When did providing grants and funding to small business become “central planning”?

    How many millions of businesses around the country get federal funding for various reasons, or tax breaks no other business gets, or local incentives to move their facilities?

    Yeah, the administration wants to support alternative energy. It also has dramatically increased carbon fuel production in the company.

    I love REASON when it is reasonable, but when it goes off on the screeds it is a waste of pixels.

    1. Okay, so “central planning” isn’t near the issue that crony capitalism is.

    2. Re: NAR,

      When did providing grants and funding to small business become “central planning”?

      You’re right, it’s not central planning. It’s largess, it’s cronyism, it’s waste, it’s a show of ignorance in physics and economics, it’s even criminal… but central “planning” it ain’t.

    3. How many millions of businesses around the country get federal funding for various reasons, or tax breaks no other business gets, or local incentives to move their facilities?

      All of that together = central planning.

    4. There is no moral justification for providing grants and funding to any small business with my money.

      1. And, for the first time under the registration system:

        Fuck off, slaver!

        1. I see NAR is a fan of central planning.

        2. Man, I was surprised to see the registration thing pop up today. And now I am thoroughly pleased.

    5. Oh, good lord. When did providing grants and funding to small business become “central planning”?

      It never “became” central planning; it’s always been a central tenet of central planning.

      How many millions of businesses around the country get federal funding for various reasons, or tax breaks no other business gets, or local incentives to move their facilities?

      Just because they do get it does not mean that I support their receiving of such funds.

    6. >When did providing grants and funding to small business become “central planning”?
      >When did providing grants and funding to small business become “central planning”?
      >When did central planning become “central planning”?

      Mind=blown

  8. This is a test of the new Hit & Run registration system. Do not adjust your sets, this is only a test.

    It was neither practical nor economical to bring utility power to the lot I bought to live on 20+ years ago so I installed 250W of PV panels instead. It worked out so well that when power did come down the road I declined to hook up.

    Women hate it however.

    1. Women require a minimum of 2kw to be happy.

      1. Is that what it takes to power the appliances in the kitchen?

        1. yeah, kitchen stuff, plus a vacuum cleaner. *ducks*

          might need more like 3-4kw for peak usage times, it was a rough estimate.

          1. Well, I mean, you don’t have to spend money to produce shoes for them, so that should be a consideration right?

            1. how are they supposed to work the fields without shoes?

              1. On my wedding day, my Pappy said “Son, three words of advice – barefoot and pregnant.”

  9. U.S. Energy Secretary Steven Chu today announced the offer of a conditional commitment for a $2.1 billion loan guarantee to support Units 1 and 2 of the Blythe Solar Power Project, sponsored by Solar Trust of America, LLC. The concentrating solar thermal power plant includes two units comprising a combined 484 megawatt (MW) generating capacity, an eight-mile transmission line and associated infrastructure.

    Wait – a 484 megawatt powerplant that costs 2.1 billion dollars?

    Not even during the asset bubble were costs that high per megawatt for a new powerplant. That price tag places the project up there with nuclear powerplant construction, with permits and all.

    is expected to create over 1,000 construction jobs and approximately 80 operations jobs.

    So what? The important cost is the cost per kilowatt of power, doesn’t matter if the powerplant is manned by people or robots. Why this emphasis on jobs created? Jobs are a cost: you want to minimize them, not increase them.

    1. That’s what happens when government is involved, OM.

      Every time.

    2. My former employer has several coal fired units rated at 850MW net and those are valued at around $1 billion each. To build them mow with required abatement technology (which they already have) would cost close to $4.5 billion.

      1. Re: db,

        I cannot say what would be the correct cost for a new coal-fired power plant today, but bear in mind that even with abatement technology which, presumably, would be part of the initial construction cost, the cost per kilowatt/hr of electrical power is still about 4 to 5 times the cost of a kilowatt/hr of produced power by a fotovoltaic system.

        http://nuclearfissionary.com/2…..and-solar/

  10. When did providing grants and funding to small business become “central planning”?

    $2.1 billion…”small business??”

    It became central planning when the central plan decreed it so.

  11. Burning taxpayer dollars to provide fuel would actually work.

    1. Well, with the dollar’s future value, it might actually be the cheapest source of fuel.

      1. Krugnutz says we can always print more money.

        1. I just came up with a fool proof plan to stop/reduce inflation: convert the money presses to exclusively solar power.

  12. The salty ham tears of the failed taxpayer-propped solar industry. Oh, they are so tasty.

  13. One would have hoped that even the dimmest politicians and policymakers could understand by now just how brilliantly well central planning worked in the old Soviet Union.

    Underscoring that point, my understanding is that solar is actually doing quite well–in terms of the amount of panels being deployed and the affordability of panels.

    According to this chart from Greentech Media…

    2011 installations in PV were up 109%, and the weighted average of a PV system price was down 20% in 2011.

    http://www.greentechmedia.com/research/ussmi/

    Point is that even when the market is growing, it can still be hard to stay competitive when the price of the product you’re selling is falling through the floor. …central planners rush in where entrepreneurs in the industry fear to tread?

    And the central planners are so screwed up and perverting the market, that, where they used to champion solar as the solution to some of our environmental problems, they’re now doing everything they can to keep the price of solar panels high?

    That’s bad for the environment. They’re not worried about the environment; they’re worried about saving their central planning asses.

    1. Re: Ken Shultz,

      they’re now doing everything they can to keep the price of solar panels high?

      Oh, c’mon – from where oh where could they get that crazy idea?

      1. I was thinking about this, specifically:

        The U.S. Commerce Department has imposed new import fees on solar panels made in China, finding that the Chinese government is improperly giving subsidies to manufacturers of the panels there.

        http://www.cbsnews.com/8301-50…..ar-panels/

        —CBS News March 20, 2012

        If you’re an environmentalist, the price of solar panels plummeting and, thus, making panels more affordable isn’t a problem to be solved.

        The Obama Administration is doing something similar with their case at the WTO about rare earth metals.

        It should be really clear to environmentalists by now that the Obama Administration sees environmentalism as just primarily being about his industrial and Labor policy.

        Is having your environmental concerns subject to the concerns of organized labor better than having them subject to the concerns of entrepreneurs? After Obama, maybe the environmentalists will let us know.

        1. So let me get this straight; Obama wants you to use solar energy, yet at the same time he wants you to be forced to pay more for the product that generates solar electricity based solely on the fact that the panels are made in China?

          Wow. This man is far dumber than I thought.

          1. He’s just disingenuous.

            To environmentalists, the price of solar plummeting 20% in a year is a good thing.

            To progressives, using the government to make people do good is a good thing.

            Progressives think making people do environmental things, like backing solar with public money, is a good thing–but they don’t really care about the environmental impact so much as they care about the government creating more, hopefully, union jobs.

            Environmentalists better get smarter about this stuff. ’cause the girl they brought to the prom isn’t dancing with them.

            But she sure talks a great game.

  14. Comments are pretty light today. Did registration scare everyone away, or were there really that many sock puppets and trolls here?

    1. Despair not… What Indian will find its way back; it will just be more of a pain in the ass for Godesky to set up extra mail accounts.

      Oh, and Tony will likely be back, too.

      1. So…nothing has really changed?
        Registration is Reason’s version of the TSA?
        I feel safer already!

          1. Oh, knock it off, OK… the TSA is a fuck-lot worse than registration on a privately-owned website.

      2. What Indian will find its way back; it will just be more of a pain in the ass for Godesky to set up extra mail accounts.

        I suspect registration will also make it easier to scrub trolls from the site, as well.

        1. Also will allow Reason to generate extra revenue.

        2. I suspect you can tie them to an IP address.

          There are ways to get around banning an IP address, but it’s kind of a pain, relatively speaking.

          The trolls might as well go elsewhere without the extra hassle.

        3. I miss knowing where to go for a bisexual relationship.

    2. Over 300 posts in AM links. But unlike in the past, the page loads okay because incif isnt overworked.

      I think the noise ratio really was that high.

    3. All of my sockpuppets have now been boiled down to this one screen name.

      (I only ever used sock puppetry for humor, mind you.)

      1. I’m thinking of registering one (1) joke name:

        R C [Insert Joke Name Here].

        1. Something Spanish, I think.

          1. “Hammer” might be appropriate.

        2. Or what about “R C Crown Royal”

        3. No, knuckleheads.

          The joke name will be R C [Insert Joke Name Here].

          Sheesh.

          1. In Spanish, like I said. What’s that, “Inserte Nombre Broma Aqu??”

            1. hmmm, Nombre Broma sounds kinda cool….

              1. no no, reverse it, Broma Nombre, rolls of the tongue nicely.

  15. “One would have hoped that even the dimmest politicians and policymakers could understand by now just how brilliantly well central planning worked in the old Soviet Union.”

    Central planning worked just fine for Stalin and Lenin. How many elections did they lose? Do you expect American politicians to identify with Ukrainian kulaks and not Bolshevik politicians?

    1. Worked great for Mussolini and Hitler too.

      1. Are we allowed to say “Drink!” under the new Regime?

          1. Liberal griefer is griefy.

  16. Black Power

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