By Peter Foster
October 21, 2010
Spain’s move to subsidize solar proved utterly unsustainable
Some foreign — and even domestic — solar equipment manufacturers are complaining that Ontario’s buy-local policies will cost investment and jobs. It takes some gall to criticize dumb and damaging initiatives when your existence depends on them.
A group of photovoltaic producers — led by Japan’s Mitsubishi Electric Corp. — is complaining that to receive Ontario’s super-premium rates for solar energy, projects must have a 60% local content. This, bleat the solar robber barons, is bad for the economy!
Worldwide, solar companies have been boosted by the policy pandemic of feed-in tariffs, whereby the high costs of uneconomic renewable power are averaged down with much cheaper conventional electricity sources. This is leading to sharp cost increases for consumers.
Takashi Sato, president of Mitsubishi Electric Sales Canada, was reported as saying this week that “We are very encouraged by the FIT [feed-in-tariff] as far as a tariff program is concerned.”
You bet they are! Who wouldn’t want their industry subsidized by having consumers forced to pay multiples of the market price for a portion of their purchases?
“However,” continued Mr. Sato, “the program contains some poison because of the domestic content requirement.”
We beg to differ. The program is pure hemlock all the way through.
Japan has challenged Ontario’s Green Energy Act at the WTO, with the EU and United States cheering it on, but this is sheer hypocrisy, even if the Ontario government’s actions are indefensible (It remains to be seen whether Dalton McGuinty plans to go the Danny Williams route of flouting trade agreements in the knowledge that Ottawa has to pick up the bill).
Anybody with half an economic brain could have seen that the universal policy urge to subsidize green energy was going to lead to both massive oversupply and unsustainable drainage of the public purse. Meanwhile we should remember that the whole green energy thrust is likely based on scientific sand.