Renewable Energy: Bubble, Scam, or Both?

The lead story in today’s New York Times is a devastating look at solar and wind power subsidies.  Too bad it appears on a Saturday when fewer people will read it (which may not be a coincidence).  The print hed and sub-hed tell it better than the online version: “Rich Subsidies Powering Solar and Wind Projects: Big Rise in Government Aid—Companies Are Virtually Assured of Profits.”  It’s worth reading the whole thing to soak in the outrageousness of the whole scene, but this graph gives a worthy summary:

The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.

This “banquet of government subsidies” as the Times describes the “cornucopia” of federal largesse, sounds like another fillip to the 1 percent doesn’t it?  And don’t forget a key phrase here—“contracts that require electric customers to pay higher rates”—which means we get it at both ends: we shell out tax money for the subsidies, and then have to pay higher utility rates, all to ensure that energy companies get a “guaranteed” profit.  File under: Crony Capitalism, Green Energy Division.

As Gomer Pyle used to say to Sargent Carter: Surprise, surprise, surprise!—in the wake of the Solyndra scandal, public support for government spending on alternative energy is ebbing pretty fast.  The Pew Research Center came out with a new survey on Thursday that shows public support for government funding of renewable energy to be sliding sharply.  The chart below from the Pew report shows that overall public support for alterative energy subsidies has fallen from 82 to 68 percent.  That’s still a pretty large majority in favor of this nonsense, but the right hand cross-tab that shows the trend by partisan breakdown is more interesting, as it shows that among Republicans support for government energy subsidies has fallen by 30 percent, while support among Democrats is virtually unchanged.  (That Democrats won’t change their views in light of the evidence should not surprise anyone, of course.)  In other words, virtually the entire decline in public support came from Republicans.  Maybe this New York Times story will affect a handful of Democrats, but I doubt it.  Just last Monday Paul Krugman was waxing poetic about solar power once again, adding the monumentally ignorant comment that perhaps we are on the cusp of “a Moore’s law for energy.”   (There is no such thing.)

The emerging partisan divide means that government subsidies for alternative energy are doomed.  About time.  Good riddance.

Meanwhile, as we’re on the subject, keep your eye on this developing story: “Batteries in Electric Cars Examined After Chevy Volt Fire.”

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