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  • Solar's Bubble Busted

    The White House’s National Economic Council’s September 2009 report, A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs, informs us: “A strong economy, but too reliant on precarious, bubble-driven growth, is unsustainable.” And it is true: our government should not try and inflate bubbles in order to spur short-term economic growth. Which is why the White House should read today’s The New York Times article on the Spanish solar program that President Barack Obama so often holds out as a model for our country to follow:

    Two years ago, this gritty mining city hosted a brief 21st-century gold rush. Long famous for coal, Puertollano discovered another energy source it had overlooked: the relentless, scorching sun.

    Armed with generous incentives from the Spanish government to jump-start a national solar energy industry, the city set out to replace its failing coal economy by attracting solar companies, with a campaign slogan: “The Sun Moves Us.”

    But as low-quality, poorly designed solar plants sprang up on Spain’s plateaus, Spanish officials came to realize that they would have to subsidize many of them indefinitely, and that the industry they had created might never produce efficient green energy on its own.

    In September the government abruptly changed course, cutting payments and capping solar construction. Puertollano’s brief boom turned bust. Factories and stores shut, thousands of workers lost jobs, foreign companies and banks abandoned contracts that had already been negotiated.

    According to a study from King Juan Carlos University in Madrid, for every “green job” created by Spain’s solar subsidies, 2.2 jobs in other sectors were destroyed and $758,471 was spent to create each green job. Germany is also paying dearly for their solar subsidies. A study commissioned by the Institute for Energy Research (IER),  found per worker subsidies for solar industry jobs are as high as $240,000.

    Spending six figures for temporary “green jobs” is not A Strategy for American Innovation.

    Posted in Energy [slideshow_deploy]

    17 Responses to Solar's Bubble Busted

    1. Dan, Illinois says:

      I own and operate a small, residential remodeling business in the Chicago suburbs. Late last year, I took a hard look at solar energy as a possible new service offering. Below are my findings that were literally shocking (no pun intended)….

      1. To purchase and install a solar system that would supply only 50% of my average customers electricity needs would cost on average $50,000!

      2. The government (tax payer money) would cover 50% of the initial "investment" costs. Tax payers would contribute on average $25,000 for one household to obtain 50% of their electricity from the sun. Note that the tax payer's contribution never sees a return, only an expense.

      3. For my client, their "breakeven" point on their $25,000 "investment" would be 25 years. This calculation does NOT take into consideration that equipmwnt will need to be maintained and replaced over time, NOR does it take into account the opportunity cost of the $25,000 being placed into some other type of interest bearing/equity growth investment.

      You can do your own calculation, based on your zip code and monthly energy usage at findsolar.com

      What a HUGE waste of tax payer dollars. This would also be a terrible "investment" for my clients.

      Al Gore, the greatest inventor of our time: First the Internet, then Global Warming…or, after this past record cold winter, I should now say "Climate Change".

    2. stirling, Pennsylvan says:

      Seems all too familar thinking in washington D.C to think that Government can use a failure of other countries ideas in the U.S.A and think that the results will be different. The private sector drives the success and inovations of the world not the public sector (which continually sucks good money to spend on bad ideas).

    3. Ozzy6900, CT says:

      So what Mr. Caroll is saying in this article is that Spain showed what happens when you jump on the band wagon without listening to the music first. Yet, none of this makes it to the ears of those who make the decisions in America. Are we to follow proven failures? If we keep listen to President Obama and Al Gore, that is what is in our future – FAILURE!

    4. Tim, Alabama says:

      What gets me is that we have tons of natural gas here in the USA which is a clean source of fuel but to suggest using it as an alternative fuel outside the home on a wide scale is rarely mentioned.

    5. Scott Lockridge - Da says:

      TXU Energy in Dallas is planning a new twist to solar power on individual homes. They will provide the installation of the panels at a drastically reduced price to the homeowner if the homeowner signs an extended contract for electricity service – much like the cell phone industry with cell phones. They are hoping to spur a lot of homeowners in the DFW Metroplex to buy into solar panels and help offset summer electricity usage while also meeting their % requirements for renewable power generation. They are thinking that such a plan would cause more companies to get into the home solar panel business which would increase the quality, increase the power generated, and decrease the costs of the panels themselves. My only problem with the plan – how much will TXU increase its power rates to offset the costs of assisting homeowners with the purchase of solar panels. The two might offset each other and the power bill doesn't actually go down – but it might go up.

    6. Brian, MA says:

      Wait, so you're saying that Obama and his team would lie to us in order to push a far left agenda that expands the role of government and decreases opportunity for the free market? This is shocking, shocking I tell you!

      There should be a rule – if Obama is opening his mouth, and sound is coming out, this is what we refer to as "a lie."

    7. John B. says:

      If you are invested for the purpose retirement or profit in short term, you may want to reconsider solar renewable energy as a source of income or latter life financial security.

      First Solar Inc is among only nine stocks that did not gain in value on the NYSE since the twelve year low and one year anniversary of the bull market March 09, 2009; in fact First Solar has declined from approx.300.00USD per share to approx 115.00USD per share today (these figures are not intended to encourage or discourage investment priorities) this is however a bit of info serious investors should research. Check in with Bloomberg.com for the latest info.

      My main point is look at Spain possibly the most aggressive investor in alternative energy; the unemployment ,the contribution Spain makes towards the decline in the EURO dollar, what about the average person in Spain, how do they feel about the departure from a productive profitable economy and society?

      Does anyone see parallels with what we observe here in America?

      Willy-Nelly green energy investment with little or no R&D before we toss billions in the wrong direction is not only ill-advised that could be considered insane.

      I could go into metallurgy and compounds involved in solar panel construction but Heritage Foundation would never post that long dialog. Selenium/compounds could be the answer. I didn’t say that officially.

      I got to go with Tim on Natural Gas we know and understand the technology and risks. The market around the world would support a Viable Industry capable of expansion on a rapid opportune basis. And understand the facts investors T.Boone Pickens has laid out the road map to your retirement you can in my opinion count on a comfortable sunset and security for your heirs.

      I'm going way too long; be very afraid of the new E.P.A. a good environmental friend; and a formidable economic enemy. See ya later, do your research!

    8. TonyfromOz Coomera Q says:

      Go to this link:
      http://www.eia.doe.gov/cneaf/electricity/epm/tabl
      This takes you to the most recent data (February 2010) for the total generation of electrical power from 'Other Renewable Sources.'. The second column shows the total from both versions of Solar power in the US. Scroll down to the bottom and it indicates the total for the rolling 12 month period.

      That amount there is power actually supplied to ALL U.S. grids over the last 12 months. That number there is 810 Million KiloWattHours (KWH) and has actually decreased over that last 12 months.

      That actually may seem a lot of power delivered to consumers, but consider this.

      That exact same amount of usable electrical power can be delivered by ONE large Nuclear Power Plant with a Nameplate Capacity of 2,200MW, and that amount is delivered every ….. 16 days.

      That's every solar power plant in the U.S.

      Now that's what I call value for money???

    9. Michelle, Seattle says:

      How do proposed solar and wind subsidies compare to current fossil fuel subsidies? I have read that if we moved the subsidies to other types of energies (solar, wind, natural gas, geothermal, nuclear), there would be more competition (better for market overall) and more sustainable affordable energy.This is why solar/wind is so expensive now. Although the information on Spain is interesting, I find little comparison between Spain's infrastructure/ technological capabilities and the US's. I also wonder how you account for the life span of a 'green' job verse a 'non-green job'. Let's say that in the US every green job DID take two existing non-green jobs. Wouldn't this be made up in the span of how long that green job will last. I guess I see green jobs as not only environmentally and socially progressive, I see them as a better long term investment.

      I would by no means suggest moving all subsides now and switching all jobs around. I more see the need for a future infrastructure change, and believe that the US should start reorganizing before there is a complete collapse. My sources come from: Harper, Charles L, Environment and Society, and University of Washington, Seattle, Professor Stanley Asah. Please inquire for more detailed sources. Thanks for your time.

    10. Mike, Florida says:

      After my divorce, I moved out to the country and built a small cabin and experimented with solar power, needless to say, my generator ran quite a bit to overcome my lack of power from solar. I had to keep adding batteries to my system and the lightening played havoc with my system. Um, yes, lightening. The inverters were very sensitive and prone to fail. I used 15 and 25 watt bulbs to conserve energy yet, I could produce enough energy in summer to turn on my lights and my tv for about 3 hours a day. My ac and refer ran off of a generator. All in all, my experiment ended with a strong desire to get hooked up to the grid and enjoy life once again. When I looked at wind power, the salesman told me it was the worst investment I could have. Poor performance and absolutely no return on my investment. So when my house was complete, I did not invest one cent in “alternative” energy. I did build an energy efficient house filled with energy efficient appliances. My cabin is now a work shop hooked up to the grid. Maybe in 20 years when solar power develops, we can look at it again.

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    12. Joe says:

      LOL! This site is ridiculous. Go stick your head up some poopy butt Saudi royal some more.

    13. David, Georgia says:

      stirling, you are right. The definition of insanity is doing the same thing over and over again and expecting different results. I work in the environmental industry..the un-subsidized part. I employ people. I don't count the jobs I create as "green". I count them as jobs. Losing 2 "regular" jobs for each "green", the math just doesn't work. Ever. A job is a job. Each one lasts until the employer decides he no longer needs the service of the employee. There is no way to calculate the longevity of a "green" job vs a "regular" job. There is not even an agreed upon definition of a gren job. Is the guy driving the garbage truck (that's been doing it for 10 years) a green job? His truck pollutes. The garbage generates methane gas. The guy making solar panels uses highly toxic chemicals to do so. The residues have to be disposed of. Does that make his job non-green? See my point?

    14. Bill Jones says:

      When you say progressive, you mean regressive right?

    15. drewski perth, weste says:

      To Dan in Illinois: $50,000 for 50% of a typical household's energy use? Are we talking about the typical castle? $10,000 should provide at least a 2kW system which would produce at least 8kW per day of energy (average). Therefore $50,000 should produce at least 40kWs per day (in Chicago) which means your average house is using 80kW of power per day. Where I live, a typical 4 bedroom, 2 bathroom house, would use less than 20% of that electrical energy — 14 to 16kW per day — and the typical Aussie home is larger than the typical American home and we use just as many gadgets.

    16. Nicolai Alatzas says:

      Dan, Illinois -

      I ran the numbers on Solar for your climate and without some incentives from your local area I would also advise against the investment. However the statement for an ROI in 25 years is not quite right. If we use annually increased cost of energy combined with the average inflation we get to a 5.5%-6.5% annual increase. This would pay you nearly $48,243-$54,277 over 20 years. These calculations are based on an 8kW solar system performing @ 80% of the systems power rating for the systems lifespan. If you’re smart about your installation of these products and maintain your system properly your components will last much longer than that. Some inverters on the market have a 100+ year life expectancy. And although your solar panels will lose about %1 of their power output annually these production values are guaranteed by every major manufacturer over the life span of the system.

      And if benefiting the environment for an honest ROI is not good enough for you than your investment will have to be placed somewhere else. Try looking at your insulation, glazing, roofing materials and mechanical and lighting systems to reduce some of that wasted resources.

      As far renewable energy is concerned you have other resources that are far more resourceful for your climate. First thing that comes to mind for the self dubbed "Windy City" is some vertical axis wind turbines. Unlike their horizontal cousins these turbines are virtually silent and are adapt at utilizing multi-directional winds. Take a look at one i installed here at http://www.youtube.com/watch?v=5dFhWTcCskw. However the two fastest returns on your investment will come in the forms of Solar Thermal and Geothermal. Being your heating requirement is the largest consumer of energy for your structures.

      Dan you clearly have some homework to do here over the next few years. Otherwise you’re going to find yourself on the unemployment line complaining about how Renewable Energies and Energy Efficient homes bankrupt you.

    17. SolaRichard in Tacom says:

      I know how to solve that little problem. Get rid of the Utility! They have had 100+ years providing us with electricity and have done a piss poor job of upgrading anything but the cars and trucks they drive in. They are still one of the largest pollutors on the planet.

      Build your solar for "Point of Use", OK? Need more help? Search "Solar Tree in Tacoma" I don't have an electric bill and I get a check each year for my solar power production. Don't you?

      Spain followed the guide of Jimmy Carter's PURPA bill of 1978. So did I in getting SB-5101 passed in 2005. I get a check and you don't. Pretty Cool, Huh?

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