Eliminate Subsidies and Loan Guarantees for Energy Production & Use

Open e-mail to Rep. Neugebauer:

SUMMARY

Government should not be involved in subsidies for solar module production, nor in installation for their use.

DETAIL

The October 10 issue of Chemical and Engineering News has a nice article by Melody Bomgardner on the solar industry. She clearly points out that there two aspects to this industry, which are economically different. The first is production of solar modules, and the second is their use or installation.

We are already familiar with the bankruptcies of Solyndra and Evergreen. In addition, two German firms recently announced that they would close US factories. SpectraWatt, which is a spinoff of Intel filed for bankruptcy in August. All of these companies were unable to compete with low-priced polycrystalline silicon from China.

There are three commercial materials which have photovoltaic properties. They are polycrystalline silicon, copper indium gallium disulfide, and cadmium telluride. Calisolar is one of the few US silicon producers still trying to compete with the Chinese. First Solar is competing with its low-cost cadmium telluride. All told, strong production competition in the global solar module market pushes down prices for solar modules. This has the advantage of improving the market for installation.

However, Germany has recently been shrinking its solar subsidies and Italy has instituted a cap on payments for solar installations. Western Europe is generally deficient in oil and has attempted to increase energy availability through solar installations. The US government has been trying to mimic these European efforts, but is behind the curve. Western Europe is starting to recognize the futility of the operation, as it cuts its subsidies. The US Government is still gung ho.

Considering the oil factor, the market for solar installations in the US is significantly reduced to specialty cases, which is as it should be, since without subsidies, it cannot compete with oil us as a primary energy source. Therefore, it is ridiculous for the US government to be propping up a less efficient energy operations through taxpayer subsidies in these times of budget deficits and huge national debt.

I strongly urge Congress to eliminate all subsidies for production of solar modules and their installation, as well as stopping the administration from granting loan guarantees to solar energy companies, which must fail in a competitive in a competitive energy market.