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No winners in Obama's green-energy trade war
Washington Examiner via AEI ^ | February 18, 2013 | Timothy P. Carney

Posted on 02/22/2013 12:31:20 PM PST by 1rudeboy

"As long as countries like China keep going all-in on clean energy," President Obama said in last week's State of the Union Address, "so must we."

Obama has thrust the U.S. into an arms race in green-energy subsidies. To grasp the difficulty - or perhaps futility - of such a contest, look at SolarWorld, the subsidized German manufacturer now drowning in a sea of cheap Chinese panels.

Bonn-based SolarWorld has benefitted nicely from German solar subsidies for years. In 2008, the company opened U.S. operations in Oregon, with help from local politicians.

Oregon offered SolarWorld up to $100 million in renewable energy tax credits. Boris Klebensberger, the company's COO, asked for more. The Oregonian reported at the time: "Klebensberger, calling the right to have renewable energy a 'civil right,' urged Oregonians to push for more government support and incentives for the sector."

At that time, an interviewer with GreenTech Media asked Klebensberger: "U.S. incentives aren't as generous as in Germany. Are you concerned about the ability to succeed in this regulatory environment?"

"That is one of the problems in America," Klebensberger responded

Obama's election made the U.S. incentives more generous. In 2009, the Export-Import Bank, a federal agency, approved $61.0 million in loan guarantees for SolarWorld to sell solar panels in South Korea.

On Earth Day 2010, while announcing "Solar Express" - an expedited process for subsidizing solar panel exports - Ex-Im Chairman Fred Hochberg toured SolarWorld's California factory.

Later in 2010 the Obama administration announced SolarWorld was eligible for an $82.2 million Advanced Energy Manufacturing Tax Credit.

Despite all this help, the company has faltered. In early September 2011, SolarWorld announced it was ending all manufacturing in its its California plant and laying off 186 of its 300 employees there. The Oregonian reported that an industry analyst said of the Oregon plant " 'To be honest, it's just a matter of time' before the plant sees job losses given China's pressure on prices."

Two weeks later, the Obama administration gave the company another hand. The Department of Energy awarded a $2.3 million stimulus grant to SolarWorld to study new manufacturing techniques for solar panels.

September was fruitful for the SolarWorld-Obama relationship: On the 30th of the month, Ex-Im approved an $18.9 million direct loan, at a low 2.63% rate, to an Indian power company buying SolarWorld panels.

Meanwhile, states and the federal government provide plenty of other subsidies for SolarWorld's customers. If you installed solar panels on the roof of your corner store in recent years, you could get a stimulus grant from the Treasury. Generate electricity with solar panels, and you can get the production tax credit. Many states require their utilities to buy solar- and wind-generated power.

But still, the profits don't flow. In recent weeks SolarWolrd announced it was laying off more than a third of the workers at its flagship Oregon factory. The company is losing hundreds of millions of dollars a year, and its stock is plummeting.

As a result SolarWorld has pocketed only $27 million of its $100 million in state tax credits, according to company spokesman Ben Santarris. If you don't make profits, you don't owe tax credits, and thus you can't benefit from tax credits. SolarWorld never got any federal tax credits, for the same reason.

Why can't SolarWorld - or Solyndra before it - turn a profit? Because the Chinese sell their solar panels for much cheaper. Chinese labor is cheaper, but U.S. solar companies like SolarWorld also charge that China "cheats."

China subsidizes its solar manufacturing and exporting even more than the U.S. does. This allegedly allows it to "dump" panels in Europe and the U.S., helping China kill U.S. competitors and thus corner the market. Santarris calls it "mercantilism."

Obama's Commerce Department, three weeks before the election, announced retaliatory tariffs against the Chinese solar industry.

But if Obama wants "affordable renewable energy," as he says, why doesn't he welcome cheap solar panels subsidized by the poor people of China. Cheaper energy means more disposable income and cheaper manufacturing, freeing up consumer spending and thus creating new jobs.

But Obama doesn't just want affordable solar energy, nor does he simply want jobs - he insists on solar jobs. That means more subsidies and tariffs.

Taxpayers and consumers pay the price for these policies. The benefit goes to companies like SolarWorld, which still can't turn a profit. You have to wonder if this trade war is a war worth fighting.

TOPICS: Business/Economy; Foreign Affairs; Front Page News; Government
KEYWORDS: greenenergy

1 posted on 02/22/2013 12:31:26 PM PST by 1rudeboy
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To: 1rudeboy

Tossing away money on technology that will never work.

2 posted on 02/22/2013 1:11:59 PM PST by Venturer
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To: Venturer

I wouldn’t mind it at all if it wasn’t my money.

3 posted on 02/22/2013 1:16:39 PM PST by 1rudeboy
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To: 1rudeboy

Let the Chinese invest everything into a fallacy for energy conservation. Solar Power works so good in the UP of Michigan during the winter that Michigan exports energy to Canada (sarc). The UP of Michigan has a problem not enough sun that many of us have to take Vitamin D supplements because not enough exposure to solar light.

4 posted on 02/22/2013 1:20:40 PM PST by hondact200 (Candor dat viribos alas (sincerity gives wings to strength) and Nil desperandum (never despair))
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To: 1rudeboy; Venturer

This con game of government green industry investments was never meant to be anything other than shuffling public tax revenues into private bank accounts, or Progressive campaign chests, or both.

As for China, “As long as countries like China keep going all-in on clean energy,” how bogus, what an outright damn false statement. The air in Chinese cities is unbreathable due to pollution!

5 posted on 02/22/2013 1:21:56 PM PST by SatinDoll (NATURAL BORN CITZEN: BORN IN THE USA OF CITIZEN PARENTS.)
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To: 1rudeboy

Crony capitalism at its worst.

6 posted on 02/22/2013 1:24:12 PM PST by facedown (Armed in the Heartland)
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To: Venturer

When discussing technology, it’s best to never say never. (Please note: I’m not saying that any of these technologies positively will work. There’s a difference.)

However, it is extremely foolish to subsidize the full-scale implementation of new technologies before they’ve proven themselves. (Actually, it’s foolish to subsidize at any time. Once the technology has proven itself, it doesn’t need a subsidy.)

A strong case can be made for subsidies for doing the basic R&D, which can be done at a small fraction of the cost of subsidizing implementation of immature technologies.

7 posted on 02/22/2013 2:01:24 PM PST by USFRIENDINVICTORIA
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To: 1rudeboy
"The company is losing hundreds of millions of dollars a year, and its stock is plummeting."

Peaked at about $67.00, in 2007 -- about $1.25 today. A drop of over 98%.
8 posted on 02/22/2013 2:55:26 PM PST by USFRIENDINVICTORIA
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To: 1rudeboy
The libs love spending our money on things no one would ever buy himself. It's sort of like how they advocate a foreign policy that eschews our national interests.

We can never be punished enough.

9 posted on 02/22/2013 4:34:49 PM PST by BfloGuy (Money, like chocolate on a hot oven, was melting in the pockets of the people.)
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To: 1rudeboy

I wonder how much real-time solar electricity/(uW) is generated per Chinese citizen in their home country.

10 posted on 02/23/2013 2:10:42 AM PST by clearcarbon
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To: 1rudeboy
Something I stumbled across that's very interesting. It says what we all know to be true about wind not being feasible and suggests what I have suspected about possible damage done by thousands of windmills.

Study: Wind power's role overestimated

"People have often thought there's no upper bound for wind power -- that it's one of the most scalable power sources," Harvard University applied physicist David Keith says.

The thought is based on the belief gusts and breezes aren't likely to "run out" on a global scale in the way oil wells might run dry, he said in a Harvard release Monday.

But an atmospheric modeling study, published in the journal Environmental Research Letters, suggests a law of diminishing returns when it comes to the largest of wind farms.

Every wind turbine creates a downwind "shadow" in which the air has been slowed by drag on the turbine's blades, so turbines have to be spaced far enough apart to reduce the effect of these wind shadows.

Its basic high school physics children. I'm a highschool dropout and even I know that when you convert kinetic wind energy into electricity, you have lost that kinetic wind energy.

11 posted on 02/26/2013 4:45:02 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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