This Is What Free Enterprise Looks Like: Google Shutters A Renewable Energy Project

Posted: Nov 23, 2011 1:31 PM

It is a common mistake to assume that economic prosperity and environmental quality are necessarily incompatible, when in fact, the exact opposite is true. A thriving economy is far better suited for environmental stewardship than a struggling one--as one of my all-time favorite think tanks, PERC, is fond of iterating, 'wealthier societies are healthier societies.' Just one of the many pieces of evidence supporting this maxim is that fact that, when people have more disposable time, income, and effort to spare, they're far more willing to care about the environment and to factor environmental considerations into their lives. This applies on both an individual level (you're not going to spring for that hybrid car or those organic cleaning products when you're struggling to make ends meet) and on a business level (there is less profit available for growing businesses and investing in other ventures). It appears that even the mighty Google is tightening its belt, and one of their environmental R&D enterprises is among the programs getting the axe:

Google has abandoned an ambitious project to make renewable energy cheaper than coal, the latest target of Chief Executive Larry Page's moves to focus the Internet giant on fewer efforts.

Google said on Tuesday that it was pulling the plug on seven projects, including Renewable Energy Cheaper than Coal...

The plans, which Google announced on its corporate blog, represent the third so-called "spring cleaning" announcement that Google has made since Google co-founder Page took the reins in April. ...

The changes come as Google is facing stiff competition in mobile computing and social networking from Apple and Facebook, and as some investors have groused about rising spending at the world's No.1 Internet search company.

"To recap, we're in the process of shutting down a number of products which haven't had the impact we'd hoped for, integrating others as features into our broader product efforts, and ending several which have shown us a different path forward," wrote Google Senior Vice President of Operations Urs Holzle in the blog post.

Google said that it believed other institutions were better positioned to take its renewable energy efforts "to the next level."

Google began making investments and doing research into technology to drive down the price of renewable energy in 2007, with a particular focus on solar power technology.

So it goes: a company made an investment, it didn't produce the results they were hoping for, and they called it quits. Many businesses have had to streamline in this sluggish economy, and environmental aspiration, in essence a luxury good, is one of the concerns that looses its foothold in the hierarchy of priorities.

Another point: the free market just demonstrated that solar energy really isn't a very profitable venture. And this doesn't mean that Google will completely stop making investments in alternative energy (and they would do so much more in a booming economy!), but it does demonstrate that these particular solar projects weren't great ideas. Wouldn't it be nice if it was only Google that had to suffer the losses of a poor investment in solar? But no. Our eager federal government went ahead and 'invested' taxpayer money into the solar energy industry for us, and now we're all down a few dollars. I just hope Google doesn't think these "other institutions" better positioned to invest in renewable energy include the federal government.