Saturday, December 12, 2009

Germany shows government role is key to thriving solar industry

Los Angeles Times article "Germany shows government role is key to thriving solar industry" (December 12th, 2009) is offensively inept in its treatment of profitability. Showing that some solar panel companies are profitable with government subsidies, the article suggests that the solar industry would thrive in the US with a little bit of government help:

What you do need, energy experts say, is a national government willing to foster the development of renewable energy. Leaving it purely to market forces -- or piecemeal local incentives, as in the U.S. -- doesn't work as well.

Nowhere does the article note that solar panels could ever be profitable without government subsidies. Indeed, the article notes that the mere suggestion that preferential rates for solar power could be dropped (rates that cost $5 per household in higher electricity bills), sent solar-power provider stock shares plummeting.

It is worth noting that companies that dig dirt holes and then fill them the next day could be profitable with high enough government subsidies. It doesn't mean supporting them is a good idea.

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