published Wednesday, June 6th, 2012

The subsidy crutch

Priming the pump.

That's the dubious term used to describe government's attempts to create public acceptance of some fledgling product or technology that hasn't managed to become especially profitable on its own. In theory, with enough government funding and promotion of said product, the American people eventually will accept the product and buy it freely.

It sounds innocuous enough. Yet it turns the free-market ideal on its head. It presumes that when the American people do not willingly purchase a consumer good that lawmakers deem valuable, government should make them do so anyway -- by using their tax dollars to subsidize the manufacture or sale of that product.

Hence, Washington has spent billions upon billions of tax dollars on corn-based ethanol, for instance, because there just wasn't "enough" public interest in buying a product that can damage small engines, reduce mileage and drive up food costs.

The process went like this:

• Washington wanted us to use more ethanol.

• We voted no with our discretionary dollars.

• Washington said "Too bad" and seized our tax dollars to produce and promote ethanol anyway, since we couldn't see fit to cooperate.

Neat, huh?

The same process has played out in solar power. Solar is vastly more expensive to produce than traditional forms of energy. Not surprisingly, therefore, consumers shy away from it in droves -- when they have the choice to do so.

But Congress and many state governments deem solar more environmentally worthy, so they require us all to support the industry with an array of tax-funded "incentives" and subsidies. You know: that whole "priming the pump" thing again.

You may have read in the Times Free Press about a local solar equipment maker, Lectrus, that is adding 30 jobs after a big expansion in 2011.

That's great for those employees. We wish them and the company only the best.

But when you read deeper into the article, it notes, "The solar industry has seen rapid growth over the past several years, benefiting from federal grants and utility incentive programs such as the Tennessee Valley Authority's energy buyback program."

That's wonderful for solar companies, their workers and the handful of consumers who buy subsidized solar products that would otherwise be much more expensive. But it's a raw deal for the rest of us.

Moreover, it doesn't count as real economic growth, because it's not supported strictly by market demand but in considerable part by the subsidy crutch.

Most of us said "No" to solar power with that portion of our income that government allows us to keep. And no is what we meant.

But when it comes to promoting costly green energy, government can't seem to take no for an answer.

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nucanuck said...

This editorial speaks to the minor subsidies. The big subsidies go to the financial industry. Almost everything the Fed and the government have done since September, 2008 has been to strengthen the faltering, over leveraged bets of the big banks. The people and the economy were relegated to the back seat and still are.

Carp about the lesser stuff if you must, but you are missing the main act.

June 6, 2012 at 12:31 a.m.
conservative said...

Another great article by the Free Press. The first two paragraphs are awesome!

Socialists never give up trying to control the market, that's why they are Socialists. They got power in our country from the vote of people who want other people's money. They are so arrogant that they believe they can decide what the consumer wants instead of allowing the consumer to make the choice (the free market).

June 6, 2012 at 8:40 a.m.

This article ignores the real subsidies China is giving their solar industry, to drive ours out of business, so we become dependent on them. That's why solar cell prices have dropped. Which is a good thing in some senses, but not others.

Maybe you think that the Free Market is so great and wonderful that you can ignore national interest, but your wide-eyed idealism will bite this country in the ass as you weaken our national strength by ignoring clear and present dangers to us.

Like being dependent on foreign oil, like being dependent on foreign manufacturing.

It's arrogant to think the other nations of the world mean us well, that they won't decide what they want matters more to them than what matters to us.

But actually, most of us would probably say "Heck yes" to solar power if we had the sense to get it. Take a look at your power bill. If it's more than 150 dollars on average a month, you would probably save money getting a loan to put a solar panel on your roof. Unless you live in a shady area or with a bad exposure.

Most people won't bother to even look though. Consumers are short-sighted enough to believe the Solar energy is more expensive. It's not. The infrastructure is a set-up cost, not a production cost. Once you have it set-up, the cost is...maybe taking your hose and spraying the panels clean once in a while, then in 20 years, maybe you worry about it again.

Consumers don't think of that, they also don't think of Geothermal heat-pumps, home gardens, or even home insulation. They see the immediate sticker, and shy away, but the upfront costs are hiding the immense savings.

Next time you look at your power-bill, figure out how much power you use. Then price a Solar energy system.

Do it, I dare you.

June 6, 2012 at 10:36 a.m.
Easy123 said...

Conservative,

Consumers like you that think global warming is a hoax will obviously not buy solar power and other energy efficient things. The government is just smarter than you. They are trying to get you to purchase things that would be less harmful on the environment. But people like you, won't buy those things because you are brainwashed.

June 6, 2012 at 6 p.m.

Well, at least their brains are cleaner than their lungs.

June 6, 2012 at 6:08 p.m.
conservative said...

Well I read Bulbs comment for the first time in months and the one by Easy that followed. The only regret I have is that I had not read them sooner. What total silliness!!

Bulbs wrote that "most" would get solar power "if we had the sense to get it." Yes, and Liberals are so sensible, and knowedgeble and intelligent. How do we know that? Why just look at all of the Houses in Chattanooga with solar panels on the roof!

Bulbs then tells us that if our light bill is more that $150 a month we "would probably save money getting a loan to put a solar panel on your roof." Notice the term "a solar panel." Bulbs doesn't have a clue about how many panels (plural) it would take to creat enough electricity to run up an $150 light bill. The roof and much of the yards in Chattanooga homes would have to be covered with panels for that much electricity.

Cost? probably $30,000 to $40,000 range. Now how many years would it take to recoup the installation cost assuming no breakage? He got that loan part right!

Maintenance,why just take your hose and spray "the panels clean once in a while" Now who believes that?

There are good reasons why Bulbs, Easy and everybody else doesn't have solar power on their home.

June 6, 2012 at 8:15 p.m.
Easy123 said...

Conservative,

http://tlc.howstuffworks.com/home/question418.htm

I can't think of a good reason why anyone wouldn't have them. They are fairly expensive. But they would help out in the long run.

I know of several houses and places in and around the Chattanooga area that use solar panels.

The Sequatchie Valley Institute is a shrine to sustainable living and energy. I was amazed when I went there and I would love to intern there. It is a very beautiful way to live.

http://svionline.org/

June 6, 2012 at 8:25 p.m.
conservative said...

Easy calls solar power " energy efficient things." Solar and wind are expensive and that is the primary reason they are not widely used now.

Easy tells me that the reason I won't buy solar is because the government is smarter than myself and that I am brainwashed.

So Easy and Bulbs do not have solar because ?

June 6, 2012 at 8:32 p.m.
Easy123 said...

Because I don't own a home. I am a graduate student. But I assure you that I will own solar panels when I become a home owner.

June 6, 2012 at 8:36 p.m.
conservative said...

Easy writes concerning solar panels...."I can't think of a good reason why anyone wouldn't have them. They are fairly EXPENSIVE ."

Yea, and I can't think of a good reason why anyone wouldn't have a Corvette. They are fairly EXPENSIVE.

Yea, and I can't think of a good reason why anyone wouldn't have a diamond Rolex watch. They are fairly EXPENSIVE.

Yea, and I can't think of a good reason why anyone wouldn't have a yacht. They are fairly EXPENSIVE.

June 6, 2012 at 8:51 p.m.
Easy123 said...

That's not a "good" reason. Some people have the budget to buy more EXPENSIVE things. But I guess you don't get that.

None of those things are comparable to solar panels either.

June 6, 2012 at 8:58 p.m.
conservative said...

Easy writes concerning solar panels...."I can't think of a good reason why anyone wouldn't have them. They are fairly EXPENSIVE ."

Yea, and I can't think of a good reason why anyone wouldn't have an island..They are fairly EXPENSIVE.

Yea, and I can't think of a good reason why anyone wouldn't have an inground pool. They are fairly EXPENSIVE.

Yea. and I can't think of a good reason why anyone wouldn't have a tennis court. They are fairly EXPENSIVE.

June 6, 2012 at 9:07 p.m.
Easy123 said...

You are aware that islands, tennis courts, inground pools, Rolex watches, yachts, and Corvettes can't power your home, correct? There is no comparison between any of the things you named and solar panels. Solar panels can save you money too.

Houses are expensive, should we have those? So are cars, jewelry, education, and sports tickets. We seem to buy those. Why not solar panels? The argument you are trying to make doesn't make sense.

http://www.fastcoexist.com/1679371/do-you-like-money-if-so-solar-panels-may-be-for-you

June 6, 2012 at 9:12 p.m.
rick1 said...

Easy, you don't even own a house and you are telling us we need solar panels. Get a job, buy a house and put the damn panels on your own house if you want, and stop telling the rest of us how to live.

June 6, 2012 at 9:12 p.m.
Easy123 said...

Rick1,

I'm not telling anyone how to live. And I never said that anyone "needs" solar panels. Get over yourself.

June 6, 2012 at 9:16 p.m.
conservative said...

Solar panels are EXPENSIVE! People don't have them because they are EXPENSIVE!

You yourself wrote"I can't think of a good reason why anyone wouldn't have them. They are fairly EXPENSIVE .

People don't have them because they are EXPENSIVE! You provided the reason why people don't buy them "they are fairly EXPENSIVE.

Do you get it now?

June 6, 2012 at 9:23 p.m.
Easy123 said...

And then I told you how just because something is expensive doesn't mean we refrain from buying it. Like I said, something being expensive is not a good reason because we buy expensive things all the time. And some people do have them. DO YOU GET IT NOW?

June 6, 2012 at 9:32 p.m.
conservative said...

The very few who get them do so because the government takes other people's money and subsidizes their cost. You correctly stated that they are "expensive" that is the primary reason why the vast majority do not get them.

Most people have electrical usage higher than solar panels can provide. The cost needed to provide high wattage appliances just doesn't make solar practical. Even most Lieberals understand that and that is one of the reasons so few have them.

June 6, 2012 at 9:37 p.m.
Easy123 said...

But there are people that bought solar panels before solar power was subsidized. And some people don't take their house totally off the grid. They will get solar panels and be on half solar/half electric or any split of the two. More people have them than you think. Solar power contribution is around 10%.

It probably isn't practical to try to take a big house with air conditioning, etc. totally off the grid. But it would be practical for a small house or a duplex.

June 6, 2012 at 9:44 p.m.
conservative said...

Easy escapes realty..."And then I told you how just because something is expensive doesn't mean we refrain from buying it"

I can't think of a better reason. I have heard and said all of my life "I/we can't afford that it is too expensive"

June 6, 2012 at 9:48 p.m.
conservative said...

You and Bulbs made my day. Thanks.

June 6, 2012 at 9:51 p.m.
rick1 said...

easy you said "Like I said, something being expensive is not a good reason because we buy expensive things all the time. And some people do have them."

What gives you the right to decide what people need to buy?

June 6, 2012 at 9:53 p.m.
rick1 said...

conservative, remember easy said he doesn't own a house. He has no clue as to what it takes to maintain a house every month and the cost of mortgage, property taxes, insurance etc. Like I said earlier Easy, get a jo, buy a house and then live without using any fosil fuels. Use your solar panels, and wind mills.

June 6, 2012 at 10:01 p.m.

Solar is expensive? Really, then why can I get them in lights for less than 5 dollars at Wal-Mart? If they're so expensive, how can they afford that huge loss?

You're really using expansive terms, and not discussing things in a genuine dialogue. Notice how you nitpicked my words above. Or were you so obtuse as to be genuinely confused as to what I meant? I doubt it. Especially since your own words are twice as confusing. Why would you get a solar panel to run up an electric bill? The key is to reduce it, not to increase it. Run down. Or are you not concerned about your own imprecise expressions? Do you not know how solar panels work?

It's almost enough to make me not bother with your numbers.

The problem with your numbers is that you're asking the wrong questions and making the wrong assumptions.

Try some real questions:

What's the current cost per watt of solar? Do you know? Try under 2.00 a watt. Some estimates are showing under a dollar a watt. So your 30-40 thousand dollar system would produce how many watts? 15-20 thousand? I think that's more than enough to offset such a power bill here, you'd get money back, but whatever, we'll go with your figure.

You don't need to eliminate your electric bill, BTW, just reduce it. How many square feet do you have that's appropriate for solar usage? Well, that is widely variable, but the key is not complete replacement, just off-setting.

What you need to ask is how much power you get per area. You do know that has been calculated, right? You can call any of the local solar companies, they can bring a device out to your house, and with GPS, the device will calculate your power generation, then they can take how much area you can devote, and calculate the power you'll generate. I dare you to call them.

BTW, 30,000 divided by 150 is...200 months. That's just under 17 years. An under 20 year payout for a money-saving home investment? Sounds great to me. And that's not even including tax rebates and other incentives.

Thanks for proving me right. I know you didn't intend to do so, but thanks anyway.

June 6, 2012 at 10:05 p.m.
Easy123 said...

Conservative,

Like I said before, just because something is expensive doesn't mean people can't buy it. I said that I, I repeat "I", cannot think of a good reason. If you can, good for you.

You make my day everyday when I read all the dumb arguments you try to put across on people.

Rick1,

Please show me where I said people NEED to buy ANYTHING. And I do have a clue what it takes to do all those things. You don't have to be a home owner to understand mortgages, property tax, and insurance. And I surely will have solar panels. But like you said before, who are you to tell me what to do??

June 6, 2012 at 10:08 p.m.

rick1, one of the expenses of home ownership, is electrical power, unless you're choosing to live without. Which is a fair choice, but I doubt you're making that decision, just by your presence here. But what would you do to eliminate that bill, or even just reduce it?

Solar Panels can help. Many people have made that calculation, seen the payoff, and taken the opportunity to save themselves some money.

If you own a home, you should look into it yourself. Call one of the local solar power companies. They'll give you an estimate.

Look at Germany, they recently generated enough power for 50% of their electric needs. And they've not completed their build-out by any means.

June 6, 2012 at 10:10 p.m.

Easy123: Don't you get it, rick1 is better than you, so rick1, being better than you, gets to tell you what to do, and never has to listen to any thoughts or insights you might have to offer.

After all, you aren't rick1, so you don't know anything.

And conservative seems to be demonstrating the truth of the adage that "If you think getting an education is expensive, wait till you try ignorance" through an incessant unwillingness to look at the actual situation, but rather relying on irrelevant comparisons.

June 6, 2012 at 10:16 p.m.
Easy123 said...

Bulbs,

Thank you for that breakdown. I enjoy your posts. Glad to have someone on here that doesn't see the world through Republican/Conservative colored glasses. We "liberals", "progressives, "free thinkers" or whatever Republicans call us, need to stick together

June 6, 2012 at 10:23 p.m.

Not a problem. I suspect half or more of them are actually fake accounts anyway.

Notice how sycophantic they tend to be?

June 6, 2012 at 10:30 p.m.
Easy123 said...

I have thought that as well. The same person on 10 accounts. Sad, very sad.

June 6, 2012 at 10:34 p.m.

Anyway, if Germany can make progress on their solar power generation, why can't the United States do better?

Oh well, at least Iowa is up on wind generation. Almost 20% of generation. And US Solar power is over 2,000 Megawatts. Of course, half of that is in California, so the per capita amount isn't that good.

Just imagine if it were, we could say good-bye to expensive wars in the Middle-East.

June 6, 2012 at 10:38 p.m.
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