Tuesday, March 20, 2012

Truly Massive Solar Fail

Turns out solar power is not profitable, and in fact it's a big money loser.

The only reason it was ever profitable was truly massive subsidies. Now, just cutbacks, not elimination, just cutbacks, on the subsidies will spell the end of the solar industry in Europe. It was in all the papers.

If an activity is profitable, it produces more in value than it uses up in costs. If an activity is NOT profitable, it uses up more in resources than it produces in value.

If the only reason an activity is profitable is artificial subsidies, financed by money taken from taxpayers at gunpoint, against their will, then the "positive profits" signal is fake, and the activity still uses up more resources than it produces in value.

Finally, any activity, no matter how wasteful, can be made "profitable" with large enough subsidies.

People could have bought solar panels on their own, voluntarily, if it made economic sense to do so. Why would being forced to buy solar panels makes sense? And, if the government takes away huge amounts of my income, and lets me have some of it back if I purchase an extremely wasteful technology, in what way is that a voluntary transaction?

The solar "industry" is composed largely of rent-seekers and brigands, combined with enough genuinely committed (though mistaken) true believers to give the whole noisome mess moral cover. The thing that's hard to understand is why anyone would believe that a technology that uses up more resources than it produces is "environmentally friendly."


Hasdrubal said...

One of the things that made me "go hmmm" about solar power was a statement something like "It takes 5 years for a solar panel to produce as much energy as it takes to create it, and a panel lasts about 20 years, so it's sustainable!" That means you have to dedicate 1/4 of your production capacity to building more panels, which seems horribly inefficient.

I wonder how long it takes for a gad fired generator to produce as much energy as it needs to be build?

Mike said...

Key difference is that the gas fired generator is consuming a finite resource. Whereas the solar panel has free energy from the sun which is infinite (well for the next 5 billion years lets say!)

I agree with the main point about subsidies, although they can be useful for a short while to allow an industry to establish themselves.
I disagree with the view that money is taken away at gunpoint.

Barnacle Bill said...

If you don't pay your taxes and you get caught, and then you refuse to pay your previous taxes plus late fines, then you will most likely be arrested and put in jail on charges of tax evasion.

Okay, so the government doesn't point a gun at people when they pay taxes. But people pay taxes under the threat of violence and coercion if they don't.

Expected Optimism said...

Mike, sometimes a new industry needs a healthy dose of outside money to help them get established, but that's what venture capitalists are for. They can and do risk their own money on new industries and the government doesn't have to lift a finger.

Anonymous said...

I can see the government assisting in general research. Your essentially trying for the lottery. Government can assist in seed projects to see if they become effective and profitable when you scale up. Massive long-term support on industries that just keep on failing just does not make sense. Solar panel manufacturing CONSUMES finite resources. It's massive adoption creates economic and environmental issues. It may solve our energy issues but it's not a great idea today because it costs and consumes so much.

21st Century Goods said...

I would be interested in some more facts relating to how the solar power uses up more resources than in creates. Governments have continued to cut subsidies as they try to reduce spending.