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Q: How Do You Say “Solar Energy Bubble” In Spanish?

A: Una Burbuja De Energía Solar!


From Thursday’s Wall Street Journal:

A group of international investors has called on the Spanish government to reconsider plans to cut costly subsidies for solar power, saying they would cause a wave of defaults and more bad loans for Europe’s banks.

The Spanish government is expected to adopt a proposal in the next few days that will cut solar–PV subsidies by as much as 30% – including for existing power plants, according to industry officials.

Tom Murley, head of the renewable-energy team at U.K. private-equity firm HgCapital, said the changes represented a “breach of trust” that would increase regulatory uncertainty in the Spanish renewables industry.

“If they proceed on this path, they’ll endanger not only our investment, but the whole sector,” said Mr. Murley, who represents a group of 20 pension-fund managers and strategic investors in the Spanish solar-photovoltaic, or PV industry.

The Spanish government spent 2.6 billion euros on solar subsidies in 2009.  After decades of government support, solar energy is still multiples higher in cost than coal and other traditional energy sources.  Probably hundreds of billions of dollars worldwide have been taken from hardworking people and spent on this feel-good solar boondoggle that has accomplished nothing but to enrich people like Tom Murley and his banker friends who ride piggyback on government rackets.  And all this wailing and predictions of doom is over cuts of only 30% or even less. 

Big-government types, like Belmar’s leadership, who voted unanimously to force  Belmar’s taxpayers to subsidize solar power in their own small way, don’t trust capitalism and the markets because they fear “chaos”.  They look to the “steady hand” of government to keep things from getting out of control.  But the truth is that it is government manipulation of currency and markets that is the cause of instability.

Participants in a true market economy can’t engage in fantasy for very long before reality forces them to cease their unproductive enterprise.  The discipline of the market prevents mal-investments from getting so large as to cause major economic distortions that are so painful to un-do.  When our leaders use the power to tax and the power to print in order to force some politically inspired fantasy on us, be it home-ownership for everyone, or some kind of carbon-free existence for everyone, they create the calamities that they say they are there to prevent.  Nothing is more powerful than the market and the harder the government fights the market the more pain it causes when they lose.  And they always lose, eventually.  Qué será será.

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