[Posted by Karl]
Megan McArdle, explaining why the federal loan guarantee to the now-bankrupt solar company Solyndra is more venture socialism than venture capitalism, concluded:
[T]his isn’t much like a VC. Or anything else that makes financial sense in the private sector. It’s like… the government giving money to companies that sound whizzy.
Instapundit Glenn Reynolds added: “A more cynical explanation is that the ‘sound whizzy’ is just meant to be a distraction from what’s really no more than a payoff to political supporters.” When the history of the Solydra debacle is fully written, Prof. Reynolds may well be correct about the political payoff angle. However, our sprawling federal government offer myriad opportunities for political payoffs, so it’s worth examining why the Obama administration would throw hundreds of millions of taxpayers’ dollars at things that “sound whizzy.” To invoke a Beltway cliche, a scandal may be what is legal more than what is illegal. The Solyndra case sheds light on the larger Scandal of Tomorrowland.
Before Solyndra went bust, solar industry leaders would frankly admit to friendly media that “the growth of their US operations is vitally dependent upon a fragile matrix of government support — state renewable portfolio standards and federal tax credits, grants and construction loan guarantees.” (There are echoes of Obamacare here, with government mandates and government subsidies propping up a Potemkin marketplace.) There are at least three major reasons solar fails as a feasible alternate energy source – diffuseness, cost and unreliability – and little progress has been made in addressing them. For example, regarding diffuseness, environmentalists have already opposed efforts to build large solar plants in the Mojave desert. On the issue of cost:
Energy Secretary Steven Chu says that the billions of dollars in federal stimulus money directed toward solar-power will cut solar power costs in half by 2015. It’s a grand sounding prediction, but his own Energy Information Agency projects that electricity from solar cells will cost nearly five times as much as electricity from natural-gas-fired power plants. And that’s without any adjustment for the unreliable nature of solar power or for the additional transmission costs.
On the issue of reliability, if you pore over the International Energy Agency’s “roadmap” for photovoltaic solar energy (.pdf), looking behind the grandiose predictions, you will find much more diktat than detail, with storage and transmission issues punted to “emerging” technologies. People used to the lights going on when they flip the switch and not freezing to death during long winter nights will come away unimpressed.
In short, the solar outlook is not sunny, which is why lefties like Ezra Klein and Dave Johnsen are reduced to defending the energy welfare state with assertions like: “If our success rate is too high, it means government is making bad investments,” and “the purpose of our government’s involvement in this is to help trigger an ecosystem around which a green-energy industry can grow.” Pouring money we don’t have down a rat hole only triggers an ecosystem for rats, which would tend to bolster the Instapundit’s point. And yet, I still think there is more to it than that.
Part of it is the left’s belief in the coming global warming apocalypse. It is a crisis the left does not want to go to waste, given the massive statism that would be involved in forcing the world off fossil fuels by federal fiat. The most feasible alt-energy remains nuclear, but American greens are bitterly divided on nuclear power, leaving them with solar and wind (which should embarrass on both counts those claiming to be the Party of Science). The hardest of hardcore greens will admit they want humanity to make do with less; the rest dress up this political poison in fuzzy notions of “sustainability.” Pretending that solar and wind are the near-future allows progressives to avoid the appearance of luddism and pose as leaning forward, rather than the movement of 20th century nostalgia they really are. It is not unlike the way Walt Disney’s original vision of Tomorrowland in his theme parks has morphed into a quaint retro-futurism that never was and never will be. That is the larger scandal behind giving money to companies that sound whizzy.