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Tipsheet

Completely Predictable: Heavily Subsidized Solar Industry Set for More Bankruptcies

This is precisely why, if you’d like a particular idea or endeavor to actually succeed, you’d be well-advised to just leave the government out of it. If it’s a viable, realistic, far-sighted, intelligent project, it should be able to stand on its own legs; if not, the free market will quickly weed it out, improve technology/efficiency, or direct our attention to more worthwhile enterprises. Unless, of course, the government is artificially propping it up with subsidies out the wazoo.

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EnvironmentalTrends points out that when you examine the federal government's energy sector subsidies according to units of energy actually produced, solar subsidies far outstrip those afforded to their energy brethren.

So national governments (our own and China's in particular) have flooded the solar market by offering up tantalizing subsidies, creating a huge imbalance in supply, and all of the companies born of this fake solar boom are starting to drop like flies. Unexpected? Not even a little:

The once high-flying solar power sector is headed for tough times, as a combination of slack demand and massive oversupply is leading to plummeting prices and profits for solar panel makers. ...

"Solyndra was just the beginning," said Jessie Pichel, head of clean energy research at the investment bank Jefferies & Co. "We're going to see a lot of companies go bankrupt."

Just how many? Of the few hundred or so solar panel makers worldwide, just 20 to 40 are expected to remain standing in a few years time, said Mark Bachman, a renewables analyst at Avian Securities. ...

This isn't necessarily a bad thing for solar power. Bachman noted that many young industries go through this phase -- think of all the auto makers at the beginning of the last century or television makers 40 years ago. As the market matures, the stronger companies survive.

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In a way, that last bit is a great point--if a new technology shows promise, people will invest in it; businesses will aggressively compete; efficiency, productivity, and affordability will improve; lesser companies will inevitably fail; and in the long run, everybody wins. And if the free market can find a way to make solar a viable form of energy that people actually want to buy on their own dime, that's awesome. What's my beef? When I, the taxpayer, am on the hook for these failed solar companies. I can decide how I'd like to 'invest' my own money without your carte blanche political agenda, thank you very much.

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