Tuesday, July 28, 2015

Hillary's 500 million solar panels

In my opinion, Hillary Clinton is the most likely Democratic candidate to win the nomination and the most likely candidate to become the U.S. president. She's been moderate from many points of view. But she has apparently decided that a viable Democratic candidate needs the unhinged far-left base to win and because these extremists have largely adopted the most radical memes of the environmentalism, including the climate alarmism, as well, she decided to outline her great "renewable energy" plan.

Barack Obama had promised a similar plan to save the world and to stop the rise of the oceans in the Universe. Hillary Clinton is proposing her plan to reduce the workers' electricity bills. There are some similarities but you may see that Hillary is a bit more down-to-Earth.
Hillary, referring to herself as "just a grandmother with two eyes and a brain", decided to do the same thing as every lady whose husband prefers to bill-and-monicoo with other women: to reduce the CO2 emissions.
Well, maybe two eyes and a grandmother's brain aren't enough to find the actual solutions to any problems.

At any rate, her plan is to install 500 million solar panels – 1.5 panels per capita – by the end of her first term. And to promise renewable electricity to cover the households' needs by 2026. Half a billion is a big number but it's possible. However, this won't necessarily make a big difference to quantities such as CO2 emissions. The panels' capacity won't necessarily be utilized most of the time; and the household electricity consumption is less than 1/2 of the U.S. power consumption, anyway.

Right now, only 0.5% of the U.S. electricity is extracted from solar energy – and this number stayed this low despite the recent hysterical growth of this weak energy source. The wind energy yields a significantly greater fraction of the U.S. power, one approaching 5 percent.

Czechia is just a medium-size country but in absolute numbers, we are still the 8th largest producer of solar energy in Europe. But that's nothing compared to 2010 when we were the 4th nation in Europe – in absolute numbers! – after Germany, Spain, and Italy. (And at one moment, we were the #3.) We produced almost 2 times as much solar power as France, more than 2 Belgiums, more than 3 Greeces, more than 15 Portugals, and more than 250 Denmarks. ;-)

Almost all the growth took place in 2009 and 2010 – one might argue that in 2009, solar panels saw great improvements. These years were the dates of our explosion of solar power – an embarrassing chapter in our history that is fortunately over. The time dependence (in peak megawatts) speaks a very clear language:
  • 2005: 0
  • 2006: 1
  • 2007: 4
  • 2008: 55
  • 2009: 463
  • 2010: 1953
  • 2011: 1959
  • 2012: 2022
  • 2013: 2064
  • 2014: 2061
The 2008-to-2009 growth was by 750 percent, in 2009-to-2010 it was by 320 percent, and there's been basically no growth since 2010. The output infinitesimally dropped in 2013-to-2014. The subsidies that existed in 2009 and 2010 were unbelievably generous. The financial losses were quickly appreciated and the support for "solar barons" quickly became an incredibly unpopular attitude. A continuation of the subsidies was predicted to lead to a 10% or 20% growth of electricity prices a year and almost no one wanted to allow anything of the sort.

American conservatives often like to suggest that their nation is more conservative than others. However, when it comes to questions such as "renewable energy", it's pretty clear that a greater fraction of the Americans (in comparison with nations like mine) drink the Kool-Aid and prefer to learn from grandmothers with two eyes and traces of a brain (and from Australian dropouts, as long as they pretend to be Harvard faculty). In Czechia, an open support for new solar subsidies would almost certainly be a political suicide for any politician.

A corrupt Czech traitor and parasite who works for the German-speaking renewable lobby, Mr Martin Sedlák, wrote a pretty useful summary of the history of the Czech solar subsidies: Cloudy skies over Czech photovoltaics. The point is that since January 2011, the politicians have already appreciated the tragedy of the solar subsidies and found a pretty good way to legally "undo" much of the subsidies.

To simply abolish the subsidies could be viewed as a retroactive change of the laws and things like that – the Czech government could be vulnerable in the courts. Instead, the Parliament introduced something that the governments introduce all the time and almost no one can effectively fight against it: a new tax. Between 2011 and 2013, the solar barons had to pay 26% of their revenues as a new tax which meant that much of the subsidies – billions of dollars – were recovered. This tax dropped to 10% of the revenues since 2014.

When it comes to the suppression of the solar subsidies, Czechia was following the example of Spain that was Europe's #2 solar energy producer in 2008-2010 (after Germany) and where the growth more or less stopped about half a year before it did so in Czechia. In early 2012, Spain stopped subsidies for all newly build solar sources. Spain has had lots of scandals – e.g. the vigorous production of solar energy at night. ;-)

Thanks to the new solar taxes imposed on the solar barons, we could have been afraid of giant lawsuits. However, things seem to be working extremely well recently. In April 2015, the Czech government's lawyers successfully divided a lawsuit by a group of foreign solar investors to seven small pieces. When divided to pieces, the plaintiffs in these frivolous lawsuits have higher legal expenses and the defendant has a higher chance to win.

Somewhat surprisingly, new good news arrived in May 2015 when the European Commission defended Czechia in this conflict and decided that the compensation for the 26-percent solar tax would violate the European rules. Whatever their reasoning was – I strongly doubt that the justification would make much sense but the final verdict was right.

With the hindsight, I think that this extra tax is a very smooth method to reverse some recently promised illegitimate subsidies. But these recommendations aren't relevant for America whose subsidized solar business is much less developed – and Clinton's campaign video is naive enough to impress a kid in the kindergarten. If Hillary wins in 2016, then approximately in 2018, it will be clear that her solar Ponzi scheme is a catastrophe of a sort. So you are invited to reread this blog post approximately 3 years from now. You surely won't want to allow her to continue with this Ponzi scheme up to 2020 when her presidency will end: the political consensus that this insanity has to stop will already be very strong around 2018. Especially if the law to support the photovoltaic energy is written in an irresponsible way, it may really turn into a virtually unlimited hole through which the taxpayer money leaks. After a year or two, everyone will see that there are no benefits, only costs.

Meanwhile, I do expect that the solar panels will be getting cheaper and more important, anyway, although I don't expect them to approach 50% of the electricity in the coming 20 years. However, the expected progress is another reason why governments should simply not artificially encourage this industry in any way.

Thanks to Luke for suggesting that this Hillary story will make me upset.

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