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Barber attacks prudent ACC decision

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Richard D. Brinkley


Representative Ron Barber’s opinion piece in the Arizona Daily Star (3/5/13) was just silly. Barber questions: “Are too many individuals and businesses putting solar panels on their roofs?”  This is a classic straw man question to divert one’s attention from the real issue: are massive government subsidies for solar companies efficient and effective? Barber avoids the tough question

Barber questions: “Is it time to call a halt to the burgeoning solar energy industry, shut down all those profitable solar companies and find more ways of generating electricity from coal and other nonrenewable forms of energy”  (emphasis mine). This is another diversion. The federal and state governments subsidize the entire green energy program: by definition, there are no “profitable” solar companies.

Maybe Barber was thinking of that successful and very profitable solar company Solyndra that lost over $500 million in loan guarantees.  Or maybe Barber was thinking of Abound Solar that lost $400 million; or A123 Solar that lost $279 million; or Evergreen Solar that lost $527 million.

Barber attacked the Arizona Corporation Commission (ACC) for being prudent in reducing renewable energy mandates that cost the ratepayers more for electricity,  not to mention the failed subsidies to solar companies. 

The ACC has gradually reduced renewable incentives year over year. This year, upfront incentives are at 10 cents per watt for residential and small businesses. A few years ago they were at $3 per watt.  Barber wants the opposite result.

When will the solar industry be able to achieve “grid parity” by being able to survive without subsidies? They always claim they are “almost there” but it seems that Barber feels they are a long way from self-sufficiency. 

Yes, the ACC has eliminated performance-based incentives for large corporations only because existing contracts will cost TEP ratepayers more than $100 million in lifetime costs. Yet, Arizona added more residential solar in 2012 than in the past three years combined.  

Europe’s experience with so-called renewable energy is causing European states to back away from renewables. According to a 2009 study by King Juan San Carlos University in Madrid, for every new green job that depended on government subsidies 2.2 jobs were lost in other industries.  

Each Spanish green job created since 2000 cost taxpayers the equivalent of $774,000 according to economics professor Gabriel Calzada, author of the study.  Spain has found its investment in renewable energy to be unsustainable.

Italy’s Bruno Leoni Institute found a similar situation. The vast majority of the jobs for renewable energy were temporary, e.g, installers of equipment. For the same amount of subsidized capital to create one renewable energy job, between 4.8 and 6.9 jobs could be created in the general economy. 

The United Kingdom dove heavily into renewable energy, especially wind power. Verso Economics, a consulting firm, performed an “input/output” economic analysis of the United Kingdom’s experience. It found that for every green job created 3.7 jobs in other industries were lost. 

The United Kingdom’s renewable energy program was found to have an opportunity cost of 10,000 direct jobs in 2009 and 2010. The conclusion of the study paralleled conclusions in other European countries: the policy to promote the renewable energy sector is economically damaging.

In March 2012, the U.S. Government reported 3.1 million green jobs. Using the Spanish and United Kingdom ratios, for the 3.1 million green jobs created in the United States, between 6.8 million and 11.5 million American jobs were lost in other industries. 

While Ron Barber believes renewable energy produces jobs, reliable studies have shown that this so-called green industry kills multiple jobs in the regular economy for every green job created.  Barber’s position, in defiance of the facts, is just plain wrong.

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Richard D. Brinkley