The “Good” Steroids

May 10, 2017

The International Olympic Committee is reviewing the legitimacy of literally hundreds of medals awarded to athletes who are suspected of having used banned substances. When the medalists are drugged, the game is rigged and the competition doomed.So, keep this in mind when you read about the growth in wind (5.6 percent of generation) and solar power (0.1 percent): renewable fuels subsidies are the functional equivalent of steroids for athletes. As Dynergy’s CEO puts it, “subsidies are the new war on coal.”

Tax credits allow wind and solar companies to juice the market, mostly by enticing affluent homeowners to install rooftop panels and opt for wind energy. The largest subsidies – more than $6 billion annually – help wind developers deliver power to where the wind doesn’t blow. That’s a lot of cash for only 5,140 jobs [BLS QCEW] that are keeping the blades spinning. [EIA “Direct Federal Financial Interventions and Subsidies”]

Growth in green power isn’t the problem; it’s how and for whom it is growing. Massive government intervention mocks the claim by NGOs that this is organic growth arising from a nation clamoring for costlier clean energy. When a friendly government lowers your operating costs with tax breaks, as it simultaneously raises your competitors’ costs with regulations — all the while shielding your customers with “net metering” from paying for the grid they use – it’s fake news to announce this growth as real, much less revolutionary. It’s easy to get pricing power if you have enough political power.

Remove the subsidies for rooftop solar panels and see if consumers hold up the roof for the solar industry. Installers will have fewer customers, now can domestic panel manufacturers compete with the China price.

What about job creation? Measured by the jobs required to generate electrons, renewable subsidies are very inefficient. Wind creates 2200 jobs per MWHr, solar 98 jobs – coal creates 7,800. [EIA EPA Feb. 2017]

The other problem from subsidized growth should concern social justice advocates. From turbines to solar panels, the green subsidy boom is for the yoga mat set. Nothing wrong with yoga. The point is rather that the bottom 50 percent of Americans with only 1 percent of the nation’s wealth have little or no taxable income to write off. Those who do are often renters with no incentive to upgrade. And the 50 percent of Americans who now describe themselves as “lower class” have more basic needs than to be “green.”

Despite this inequity, the obvious difference between steroids for athletes and subsidies for renewable fuels is that the latter aren’t banned. Far from it. Some in Congress view green subsidies as necessary sacrifices that taxpayers must make to help wind and solar companies win the race for power market domination while helping affluent consumers indulge their green vanity.

What’s not to like?