The Very Expensive “New Energy Economy”


There are times when one wonders whether or not the writers for the Denver Post actually read the Denver Post. Then, there are times when one wonders whether is would make any difference if the did.

On October 14, the Post carried an AP story noting that the new German government, a coalition between the Christian Democrats – Mark Steyn’s right of left of right of center party – and the Free Democrats, who actually permit themselves the luxury of promoting free markets now and again, would be cutting Germany’s legendary solar subsidies, which the country had maintained for about two decades. Apprently, subsidizing expensive energy doesn’t look so good during a recession, and Germany is willing to forego the expensive green jobs that such industry creates:

Investors expected Germany to cut back on solar subsidies this year as the recession sapped demand and tightened government budgets, said Benedict Pang, an analyst with Caris and Company in San Francisco.

“During the downturn, the wheels started to come off” in Germany, Pang said. “A lot of solar companies have weaned themselves off of that market.”

Germany has guaranteed renewable energy generators fixed payments for the power they produce to encourage the production of solar panels and several of the world’s leading producers of the technology are based here.

A week and a half later, Bloomberg reported that the Germans had done just that:

Chancellor Angela Merkel’s new junior partner in government, the pro-business Free Democrats, approved a four-year coalition program that points Germany toward tax cuts and a reprieve for nuclear energy….

Separately, the government will seek talks with solar-energy industry on possible “adjustments” to avoid “excessive subsidies,” according to the coalition draft.

So naturally, it was a source of much rejoicing when the German company, SMA, no longer able to make money on its home turf, shifted production to Colorado, bringing with it its prize of 300 jobs, at a cost of a mere $12,000/job to the Colorado taxpayer.

Now, that’s not as much as the colossal $240,000 per job – plus the added cost of the actual electricity – that Germany’s worked itself up to. And the so-called “green jobs” trap has been largely responsible for the depth and intractability of Spain’s contractiion during the global recession. Of course, they’re paying about $600,000 a job, so we’ve still got a ways to go to match that.

These jobs are incredibly expensive, as Colorado is about to find out, and apparently don’t survive the end of subsidies.

Let’s just hope that those interim committees take note of why Colorado beat out other US states:

[Colorado Office of Economic Development and International Trade’s Pete] Roskop said other states were throwing more money for incentives at the company, but Colorado had lower costs for items such as corporate taxes and worker’s compensation insurance.

Then, there are the times when one wonders whether some people ever read the business pages at all.

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