Last week, the American Wind Energy Association, which serves as wind power’s top lobbying shop, released a report warning that the industry would face a “sharp decline” in 2016, if the Congress does not extend a single subsidy by the end of 2015.
This week, Bloomberg New Energy Finance released a report stating that the solar industry in the U.S. will “nosedive” in 2017, if the Congress fails to extend the industry’s primary subsidy by the end of 2016. The sector’s chief lobbying outfit, the Solar Energy Industries Association, issued a press release supporting the report’s conclusions, and urging the Congress to act.
These reports are impossible to square with the claims, often made by green energy proponents and lobbyists, that solar or wind energy has achieved parity with fossil fuels. (Consider this New York Times headline: “Solar and Wind Energy Start to Win on Price vs. Conventional Fuels.”). If an industry’s existence would come to an end with the expiration of a single tax break, then it cannot be competitive.
Will wind or solar power be competitive, ever? When their tax breaks are secure, the wind and solar lobbies claim they’re vibrant industries; but every time their tax breaks are set to expire, they claim that market maturity is just around the corner, and that they need just one more extension of handouts.
But government support for wind and solar power is not new. Its roots reach back to the Carter administration. Way back then, wind and solar power’s primary problem was their intermittent production of energy. That remains true today. In this fashion, the success of the wind and solar industries is less a function of the wind and solar industries, and more so of the energy storage industry.
In this light, wind and solar energy has matured. It has progressed as far as it can go, and its best effort was to fall well short of market viability. So they’re doomed to perpetual market unreadiness, for as long as the government props them up. This should come as no surprise to anyone who doubts the government’s ability to pick winners in any market.
By extending taxpayer handouts (again) to wind and solar power industries, the Congress would compound (again) its initial mistake by throwing good money after bad (again). For more, see Robert Bradley, Jr.’s excellent post today on Master Resource, “Dear House: Say NO to Wind PTC (10th extension crucial for Obama’s energy/climate agenda).”