Green Energy Subsidies: Give ‘em an Inch, They’ll Take a Mile

One lawmaker has noticed an “eerie” similarity between A123 and Solyndra, two green energy companies in which the government “invested” taxpayer money.  Executives of both of these companies “appeared to have tight connections with the White House… The CEO [of A123] donated thousands to the Obama campaign and even attended a White House meeting with the President.” 

The Washington Guardian reports:

“[Rep. Joe] Barton, R-Texas, reacted to a Washington Guardian story last week that detailed how A123’s executives spent $1 million on a federal lobbyists and showered Democrats with donations even as the firm struggled for financial viability.

The company scored private meetings with both President George W. Bush and President Barack Obama and successfully secured a $250 million stimulus grant before filing for bankruptcy last week, the latest company supported by the Obama clean energy stimulus program to hit hard times.”

Inadvertently, the story hints at the problem.  Both sides have left themselves open to charges of cronyism because they have both “helped fashion the legislation that opened the door to today’s clean energy funding.”  That said, it is never too late to get it right.  Republicans and conservatives have done right by highlighting the failures of Solyndra, A123 and others, but they must go further, and resist standing by government intervention in the energy market that is done with “care” and “due diligence” because “each dollar handed out… comes from taxpayers.”

Look, government subsidies are either a good idea or they are a bad idea.  If the government is dangling cash before entrepreneurs (and I use that term loosely when the business model is fully dependent on cronyism and government handouts) who know full well the venture they are about to embark upon is destined for failure without massive government subsidies, do you think they’re going to selflessly do what’s best for taxpayers?   Past experience suggests otherwise.

Heritage reminds us “A123 admitted its inability to continue as a ‘going concern’ unless it is able to find cash, and fast. [sic]”  They weren’t going to get this money by selling their products (like other businesses have to in order to stay open), because they were politically favored.  In their desperation, they not only received a $249 million Department of Energy (DOE) manufacturing grant, but they also sought to get investments from a Chinese company, which failed to materialize, and received another $14 million in development grants from the DOE.

The principled conservative approach to green energy is first and foremost that government should never be in the business of picking winners and losers for several reasons, not the least of which is that they do a lousy job at it and that it almost always involves corrupt cronyism.  To paraphrase Mitt Romney, you don’t pick winners and losers, you just pick the losers.

Liberals often champion the need to “invest” in green energy (and in the future in general) as though investments are categorically good.  Let’s translate: we want to throw your money away today, so that you have less of it tomorrow.

Investments aren’t always good.  I could invest money in my toilet by flushing hundred dollar bills down it, but that wouldn’t make it a good investment.  More importantly, though, funneling taxpayer money to politically connected green energy companies is a government subsidy in investment’s clothing and nothing more.

Heritage’s David Kreutzer makes the conservative argument against green energy subsidies very clearly:

“Fundamental economic logic can guide us. Energy sources that require subsidies produce energy whose value is less than the costs of production. So these programs actually reduce national income since they take higher-valued resources and turn them into lower-valued output.”

Heritage also has a complete list of President Obama’s taxpayer-backed green energy failures:

  1. Evergreen Solar ($25 million)*
  2. SpectraWatt ($500,000)*
  3. Solyndra ($535 million)*
  4. Beacon Power ($43 million)*
  5. Nevada Geothermal ($98.5 million)
  6. SunPower ($1.2 billion)
  7. First Solar ($1.46 billion)
  8. Babcock and Brown ($178 million)
  9. EnerDel’s subsidiary Ener1 ($118.5 million)*
  10. Amonix ($5.9 million)
  11. Fisker Automotive ($529 million)
  12. Abound Solar ($400 million)*
  13. A123 Systems ($279 million)*
  14. Willard and Kelsey Solar Group ($700,981)*
  15. Johnson Controls ($299 million)
  16. Schneider Electric ($86 million)
  17. Brightsource ($1.6 billion)
  18. ECOtality ($126.2 million)
  19. Raser Technologies ($33 million)*
  20. Energy Conversion Devices ($13.3 million)*
  21. Mountain Plaza, Inc. ($2 million)*
  22. Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
  23. Range Fuels ($80 million)*
  24. Thompson River Power ($6.5 million)*
  25. Stirling Energy Systems ($7 million)*
  26. Azure Dynamics ($5.4 million)*
  27. GreenVolts ($500,000)
  28. Vestas ($50 million)
  29. LG Chem’s subsidiary Compact Power ($151 million)
  30. Nordic Windpower ($16 million)*
  31. Navistar ($39 million)
  32. Satcon ($3 million)*
  33. Konarka Technologies Inc. ($20 million)*
  34. Mascoma Corp. ($100 million)
  35. *Denotes companies that have filed for bankruptcy.

Read More: The Conservative Plan to End Energy Subsidies

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