Sunday, January 31, 2016

Turning a Subsidy into ‘Payment for a Value Delivered’: Corporate Welfare for NJ Solar Companies

A New Jersey bill introduced into the state legislature earlier in 2015 would “give New Jersey one of the nation's most ambitious goals for renewable energy sources like solar and wind power,” NJ Advance Media’s Matt Friedman reports for Friedman continues:

The bill (S2444) would require that 80 percent of New Jersey's energy use would be from renewable sources 35 years from now.

Supporters say the legislation is needed to crack down on carbon-producing forms of energy production like coal and gas.

“Crack down” is an appropriate term. In terms of reliability, scalability, and cost, solar and wind are incapable of competing with coal and natural gas openly and fairly in the market. So the solar power industry, as Friedman observes, has lobbied hard for the bill, because it must turn to government force, in the form of mandates—i.e., guns—to crush its competitors.

But, even the mandates aren’t enough. The renewable industry needs subsidies, as well. NJ’s existing state-imposed “renewable” energy program is funded by surcharges on electricity bills. As Friedman reports:

Stefanie Brand, New Jersey's rate counsel, said ratepayers are already on the hook for $5 billion in expenses related to solar power, and that the bill would result in almost $3 billion more.

Incredibly, as Friedman reports, “Solar industry executives disputed the idea that they're being given subsidies[!]” The $billions in inflated bills electric ratepayers are forced to pay to support solar installations around the state are “a payment for a value delivered,” said Lyle Rawlings, president and CEO of Flemington-based Advanced Solar Products and co-founder of the Mid-Atlantic Solar Energy Industries Association.

Even more incredible, Rawlings—apparently believing that the public will believe anything—flipped the argument, saying that the fossil fuel companies are the ones receiving subsidies!: “Being allowed to emit those pollutants,” he said, “is a subsidy, because the cost of that is borne by the public.” (If pollution is a subsidy, then renewable energy is also subsidized in the same way. But Rawlings evades renewables’ pollution problem, which are very significant.

I left these comments, edited for clarity:

I don’t know which is worse; a bunch of politicians sitting around voting to force “renewable” energy mandates on us, or a corporate welfare recipient claiming that the handout he receives is not a subsidy, but a non-subsidy is.

The fossil fuel industry is not simply “allowed to emit pollutants.” It is subject to anti-pollution laws, and it has risen to the challenge by making regular, expensive investments in new technologies, turning its product progressively cleaner over time—all the while maintaining an uninterrupted flow of cheap, plentiful, reliable energy to the public. Do the costs of pollution control and cleaner burning fossil fuels get passed on to the public? Sure, and rightfully so. After all, the consuming public does the “polluting” by buying and using fossil fuel energy sources.

When I buy a car, I pay, through the purchase price, for the catalytic converter that cleans up the emissions coming from the tailpipe of my car. Why shouldn’t I pay? I’m the one using the car. When I buy gasoline, I’m paying for myriad additives to make the gasoline burn cleaner. Why shouldn’t I pay? I’m the one buying and burning the gasoline. When I use electricity, my electric bill includes my share of the cost of the pollution control devices on electric power generating plants. Why shouldn’t I pay? I’m the one using the electricity. Should others be forced to pay for my catalytic converter; my gasoline additives; my share of the power plant cleaners, and other pollution clean-up costs that my spending decisions generate? If there is a pollution “subsidy,” then we all—from the driller to the refiner to the energy transport companies to the consumers—are responsible for it.

Rawlings’s view is rationalization writ large. The public gets stuck with this renewable subsidy “payment for a value delivered” while not receiving any actual value for the money. If the solar industry is truly delivering a value, then why must ratepayers be forced to pay for the subsidies through inflated electric rates? Why the mandates? The answer is obvious.

Our taxes and our electric bills are artificially inflated beyond what we would voluntarily pay, and the money is transferred to solar companies and their customers, not for a value delivered but to cover the solar company’s inability to compete. By definition, that is a subsidy. And then Rawlings has the chutzpah to assert that the fossil fuel industry is getting a subsidy?

But a subsidy is what the so-called “renewable energy” industry is forcing on me. The “renewable” industry doesn’t want its customers to bare the full cost of its uncompetitive product the way fossil fuel consumers willingly do. Instead, it lobbies for subsidies to make up for the value they cannot deliver, so they can stick taxpayers and electric ratepayers with the bill. To all of you “green” energy consumers plopping solar panels on your rooftops, I say: Welcome to the dole!

I’m willing to pay the pollution control costs embedded in the cost of the fossil fuels I buy because I judge fossil fuels to be a tremendous value to me. It’s a value not only in terms of dollar cost but also because I know that my life is cleaner, healthier, and safer—for longer—than the lives people had before life-giving fossil fuel energy prosperity arrived. Why should I also be forced to pay for somebody else’s “renewable” energy installation? Let them pay their own way.

The solar industry is after corporate welfare. They’re just not honest enough to admit it. But most of we consumers are not that stupid. We know what a subsidy is, and that we are paying for it. We know they need the subsidies, along with whatever favors and mandates they can weasel out of the legislature, for one reason and one reason only: They can’t deliver a value equivalent anywhere near to what the fossil fuel industry has been delivering for decades. Otherwise, they’d be able and willing to compete on the free market and let energy consumers decide for themselves if Advanced Solar Products and its ilk actually do have a value to deliver. They'd be confident in their ability to convince consumers to voluntarily buy their product without coercive government “help”. They won’t face the market music, because, as of now, they know that without the protection of government coercion, consumers would see more value in fossil fuels, pollution costs and all, than in “non-polluting” renewables.

Unlike the “renewable” dogmatists, I’m not against any energy source. I simply want to stop being stuck with the costs of Solar’s corporate welfare bill. Let me and all consumers decide on a level market playing field which energy source is best. It’s time to end the crony socialism. If “renewables”—which aren't actually renewable—really are that good, they will have no problem doing to fossil fuels what digital photography did to the once dominant Eastman Kodak; what modern communications technology did to the AT&T monopoly; what the personal computer did to IBM’s mainframe business; and what electrification did to John D. Rockefeller’s near-total dominance of kerosene-based nighttime illumination more. Until that day comes, if it comes, stop demonizing and hampering the fossil fuel industry and its customers.

Related Viewing:

Excerpt from Response to Pope Francis’s Intervention into Global Warming—James H. Rust, The Heartland Institute:

It takes [abundant] energy to produce clean water and dispose of sewage. Fossil fuel energy is preferable for transportation than animals used in the past that despoiled roads. Fossil fuel supported energy is far cleaner and healthier for heating and cooking than wood and dung used in the past. Electricity is preferable for lighting than whale oil or candles use centuries ago. The list goes on and on.  All of the prosperity and good health of developed nations is attributed to fossil fuels.

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