A useful principle in business is not to throw good money after bad trying to salvage a mistake. Evergreen Solar has pulled its own plug, filing for bankruptcy. The company had been seen as a shining example of the new industry that would emerge to produce clean energy (although there is nothing clean about the production of solar panels), but it could not make it.
The company fired its employees and moved production to China. 800 “green jobs” gone—another blow to the planned economy the Obama Administration promises will restore prosperity. The company owes creditors about a half-billion dollars. It took benefits from Massachusetts that the state claims total $58 million.
The demand for solar panels has fallen as assorted governments have cut subsidies. They are required for most installations, unless you live off-the-grid in the hills of New Mexico.
In our book, The False Promise of Green Energy, my coauthors and I point out the horrible economics of most of the highly-touted “clean” energy sources. They collapse without on-going direct subsidies, as with Evergreen Solar, or indirect subsidies in the form of forced purchase of their output by electricity producers. Similar things are happening in Europe as the cash crunch is making governments back away from their state-imposed green energy boondoggles that run up prices, punish consumers, and drive away businesses.
Gloating accomplished, let me note that this is no different than all the other central planners and their schemes of economic progress based on corporate welfare. The conservative saint of the day, Governor Rick Perry from my state of Texas, has been involved in this foolishness like most other governors.
The scheme means taxing citizens and existing businesses to hand out gifts to newbies in the guise of “economic development.” One little bundle was given to Cabela’s, the big sporting goods store, so we might enjoy its presence in DFW. No doubt it otherwise would have bypassed this market of 6 million consumers. Some years ago, the good governor handed millions to WaMu so it might grace the state with its presence. Was there a shortage of banks in Texas? Did we need a major bad-loan operator to enter the state due to a mortgage shortage?
The Evergreen Solar fiasco is just one of many such bits of foolishness. When politicians plan economic development, “green” or not, we get what they force us to pay for.