Russ Choma presents "Covering the Green Economy - Follow the Green Money," a Webinar geared toward business journalists.
The Donald W. Reynolds National Center for Business Journalism provides free tools and training for business journalists throughout the year. For more information, please visit businessjournalism.org.
US Chamber Report: What If...Energy Production was Banned on Federal Lands an...Marcellus Drilling News
This report, the first in the Chamber's Energy Accountability series, finds that if the federal government under Obama and Clinton (as they advocate) were to shut down further energy production from public lands, the result would be catastrophic: the U.S. economy would lose 400,000 jobs and $70 billion in annual GDP.
A U.S. Chamber of Commerce report, second in a series, that imagines what the economy would look like today if the shale energy revolution had not taken place. It's not a pretty picture.
While the politically charged Solyndra case made the headlines, the “real news” is the beginning of the phase-out of several federal support programs, which is going to be a game-changing factor in the field of renewable energy in the US.
Russ Choma presents "Covering the Green Economy - Follow the Green Money," a Webinar geared toward business journalists.
The Donald W. Reynolds National Center for Business Journalism provides free tools and training for business journalists throughout the year. For more information, please visit businessjournalism.org.
US Chamber Report: What If...Energy Production was Banned on Federal Lands an...Marcellus Drilling News
This report, the first in the Chamber's Energy Accountability series, finds that if the federal government under Obama and Clinton (as they advocate) were to shut down further energy production from public lands, the result would be catastrophic: the U.S. economy would lose 400,000 jobs and $70 billion in annual GDP.
A U.S. Chamber of Commerce report, second in a series, that imagines what the economy would look like today if the shale energy revolution had not taken place. It's not a pretty picture.
While the politically charged Solyndra case made the headlines, the “real news” is the beginning of the phase-out of several federal support programs, which is going to be a game-changing factor in the field of renewable energy in the US.
Energy Efficiency – Good for the World’s Economy; Good for the Nation’s Econo...Alliance To Save Energy
States awaiting stimulus funds will be pleased to know that when it comes to funding energy efficiency programs, their dollars will go far. Drastically reduced energy consumption and immediate job growth are just some of the benefits that effective policies and programs can bring, particularly to the Appalachian region, which has the highest energy consumption in the country. Kateri Callahan presented these findings to the annual Charlotte Regional Partnership Investors Board in Charlotte, N.C., where already progressive energy efficiency policies and programs are taking root. Callahan also briefed the audience of investors and board members on the climate and energy bills moving through Congress.
Report, As Solar Explodes Nationwide, Washington Falls, Lags Behind Most Othe...ArtisanElectricInc
With one solar panel in the state for every 28 people, Washington is falling behind a majority of states in an annual ranking of solar power capacity, despite having the technical potential to produce 21 times as much electricity from solar power as the state consumes each year. In this year’s ranking, Washington dropped to 27th in total solar capacity and 30th in total solar capacity per capita, after ranking 25th in both categories last year.
Compares what solar energy advocates want you to believe to how solar energy performs in real life. Covers costs, efficiency, impact on consumers, solar resources. Discusses Georgia's electricity rates compared to other states and energy mix, Georgia's Territory Act and the potential impact of deregulation, and HB 657.
Il World Energy Focus, nuovo mensile online della WEC's community, una e-publication gratuita per essere sempre aggiornato sugli sviluppi del settore energetico. Il World Energy Focus contiene news, interviste esclusive e uno spazio dedicato agli eventi promossi dai singoli Comitati Nazionali.
Former Ambassador and head of the US delegation to the Kyoto Protocol negotiations, Stuart Eizentstat, Partner with law firm of Covington & Burling LLP, delivered the keynote address at the GW Solar Institute Symposium on April 19, 2010. View more info at: solar.gwu.edu/Symposium.html
Kateri Callahan joined Israeli mayors and senior representatives from local Tel Aviv authorities and agencies to discuss the challenges and potential for Israeli cities in deploying energy efficiency at scale. Showcasing success stories and case studies from the U.S. and around the world, Callahan demonstrated the economic, environmental, and security benefits of advancing programs, technologies, funding and infrastructure that promote efficient energy use.
The ScottMadden Energy Industry Update – Early Fall 2013ScottMadden, Inc.
This semi-annual publication features our view of recent significant events and emerging trends in the energy industry. Themed “The Times Are a-Changin’ (or Serenity Now!),” this issue surveys the energy, utility, and clean tech business environments. It examines a broad array of topics.
Alliance Associate Schneider Electric hosted Alliance President Kateri Callahan at its North America Leadership Forum, where Callahan discussed opportunities and obstacles in the energy efficiency movement in 2010 and beyond.
The 2009 American Recover and Reinvestment Act (ARRA) promises substantial funding for energy efficiency programs – to the tune of $26 billion – and many in the business of energy efficiency such as TAC are looking for ways to access its funding. In order to educate its employees and partners on the impact of the ARRA, TAC presented an educational webinar in which Callahan addressed the stimulus package, the Obama administration's impact on energy policies, and the role TAC can play in delivering energy related projects.
Extra Credit
1. A “natural monopoly” exists when
A company creates a monopoly because it has an important patent
A company naturally creates a monopoly because it was more innovative than other competitors
One company can serve a market less costly than two or more firms.
2. True or False? Most public utilities are considered to be natural monopolies.
3. The presence of very large fixed costs and relatively low variable costs typically results in
A. Average costs declining throughout the relevant range of demand
B. A natural monopoly
C. Both A and B
D. Neither A nor B
4. An example of a Public Utility would be
Walmart
El Paso Electric Co.
Congress
Microsoft
5. The Public Interest Theory of regulation suggests
Government regulates to promote social economic welfare (as economists would prescribe)
Government regulates to promote their own welfare
Government should not regulate at all
None of the above
6. True or False? Stigler’s Economic Theory of Regulation suggests that people in government are self-interested individuals.
Suppose a power plant generates an additional 10 mWh of electricity for a profit of $100,000. This additional production also creates pollution damages to others equivalent to $120,000. From society’s view, the efficient decision is not to generate the additional power.
7. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the public has the right to receive damage payments.
8. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the power plant has the right to pollute.
9. True or False? If the market causing a negative externality has a property right to do so, the Coase Theorem would suggest that those being harmed would organize and make a payment to stop or limit the market activity.
10. The presence of transaction costs in the “real world” may
Give a rationale for government regulation.
Ensure that the Coase Theorem efficiency results always prevail.
Make it easy to organize people against a polluting company.
11. Why is it rational for groups affected by regulation to expend resources to influence regulatory decisions?
Government’s power of coercion may be used to redistribute wealth between groups of people.
Government will do what is best for the public interest.
Government regulation should be eliminated.
12. “Taxation by Regulation” (Richard Posner) suggests that regulation is used for what purpose?
Help airlines and other regulated industries.
Cross-subsidize certain markets or market segments.
Increase the general fund (tax revenues) directly collected by the government.
Protect the environment.
13. True or False? The “Capture Theory” of regulation is an extreme (polar) case of the Economic Theory of Regulation.
14. Which of the following is not an assumption under Professor Stigler’s “Economic Theory of Regulation”?
All actors in a political-economy are self-int.
Energy Efficiency – Good for the World’s Economy; Good for the Nation’s Econo...Alliance To Save Energy
States awaiting stimulus funds will be pleased to know that when it comes to funding energy efficiency programs, their dollars will go far. Drastically reduced energy consumption and immediate job growth are just some of the benefits that effective policies and programs can bring, particularly to the Appalachian region, which has the highest energy consumption in the country. Kateri Callahan presented these findings to the annual Charlotte Regional Partnership Investors Board in Charlotte, N.C., where already progressive energy efficiency policies and programs are taking root. Callahan also briefed the audience of investors and board members on the climate and energy bills moving through Congress.
Report, As Solar Explodes Nationwide, Washington Falls, Lags Behind Most Othe...ArtisanElectricInc
With one solar panel in the state for every 28 people, Washington is falling behind a majority of states in an annual ranking of solar power capacity, despite having the technical potential to produce 21 times as much electricity from solar power as the state consumes each year. In this year’s ranking, Washington dropped to 27th in total solar capacity and 30th in total solar capacity per capita, after ranking 25th in both categories last year.
Compares what solar energy advocates want you to believe to how solar energy performs in real life. Covers costs, efficiency, impact on consumers, solar resources. Discusses Georgia's electricity rates compared to other states and energy mix, Georgia's Territory Act and the potential impact of deregulation, and HB 657.
Il World Energy Focus, nuovo mensile online della WEC's community, una e-publication gratuita per essere sempre aggiornato sugli sviluppi del settore energetico. Il World Energy Focus contiene news, interviste esclusive e uno spazio dedicato agli eventi promossi dai singoli Comitati Nazionali.
Former Ambassador and head of the US delegation to the Kyoto Protocol negotiations, Stuart Eizentstat, Partner with law firm of Covington & Burling LLP, delivered the keynote address at the GW Solar Institute Symposium on April 19, 2010. View more info at: solar.gwu.edu/Symposium.html
Kateri Callahan joined Israeli mayors and senior representatives from local Tel Aviv authorities and agencies to discuss the challenges and potential for Israeli cities in deploying energy efficiency at scale. Showcasing success stories and case studies from the U.S. and around the world, Callahan demonstrated the economic, environmental, and security benefits of advancing programs, technologies, funding and infrastructure that promote efficient energy use.
The ScottMadden Energy Industry Update – Early Fall 2013ScottMadden, Inc.
This semi-annual publication features our view of recent significant events and emerging trends in the energy industry. Themed “The Times Are a-Changin’ (or Serenity Now!),” this issue surveys the energy, utility, and clean tech business environments. It examines a broad array of topics.
Alliance Associate Schneider Electric hosted Alliance President Kateri Callahan at its North America Leadership Forum, where Callahan discussed opportunities and obstacles in the energy efficiency movement in 2010 and beyond.
The 2009 American Recover and Reinvestment Act (ARRA) promises substantial funding for energy efficiency programs – to the tune of $26 billion – and many in the business of energy efficiency such as TAC are looking for ways to access its funding. In order to educate its employees and partners on the impact of the ARRA, TAC presented an educational webinar in which Callahan addressed the stimulus package, the Obama administration's impact on energy policies, and the role TAC can play in delivering energy related projects.
Extra Credit
1. A “natural monopoly” exists when
A company creates a monopoly because it has an important patent
A company naturally creates a monopoly because it was more innovative than other competitors
One company can serve a market less costly than two or more firms.
2. True or False? Most public utilities are considered to be natural monopolies.
3. The presence of very large fixed costs and relatively low variable costs typically results in
A. Average costs declining throughout the relevant range of demand
B. A natural monopoly
C. Both A and B
D. Neither A nor B
4. An example of a Public Utility would be
Walmart
El Paso Electric Co.
Congress
Microsoft
5. The Public Interest Theory of regulation suggests
Government regulates to promote social economic welfare (as economists would prescribe)
Government regulates to promote their own welfare
Government should not regulate at all
None of the above
6. True or False? Stigler’s Economic Theory of Regulation suggests that people in government are self-interested individuals.
Suppose a power plant generates an additional 10 mWh of electricity for a profit of $100,000. This additional production also creates pollution damages to others equivalent to $120,000. From society’s view, the efficient decision is not to generate the additional power.
7. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the public has the right to receive damage payments.
8. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the power plant has the right to pollute.
9. True or False? If the market causing a negative externality has a property right to do so, the Coase Theorem would suggest that those being harmed would organize and make a payment to stop or limit the market activity.
10. The presence of transaction costs in the “real world” may
Give a rationale for government regulation.
Ensure that the Coase Theorem efficiency results always prevail.
Make it easy to organize people against a polluting company.
11. Why is it rational for groups affected by regulation to expend resources to influence regulatory decisions?
Government’s power of coercion may be used to redistribute wealth between groups of people.
Government will do what is best for the public interest.
Government regulation should be eliminated.
12. “Taxation by Regulation” (Richard Posner) suggests that regulation is used for what purpose?
Help airlines and other regulated industries.
Cross-subsidize certain markets or market segments.
Increase the general fund (tax revenues) directly collected by the government.
Protect the environment.
13. True or False? The “Capture Theory” of regulation is an extreme (polar) case of the Economic Theory of Regulation.
14. Which of the following is not an assumption under Professor Stigler’s “Economic Theory of Regulation”?
All actors in a political-economy are self-int.
Softer Solar Landings: Options to Avoid the Investment Tax Credit CliffGW Solar Institute
Federal tax policies have been an important driver for solar’s recent remarkable growth, but without action during the 114th Congress, the 30-percent investment tax credit (ITC) for solar and other clean energy technologies will expire at the end of 2016. If Congress were to allow this policy shock to occur, the economics of solar investments would worsen, reducing solar deployments in 2017 and beyond. Solar jobs would be lost, and solar cost reductions would be delayed. While these negative impacts of current law are undeniable, their magnitude remains an open question. This policy brief estimates the impacts that current law would have on the solar industry. It also formulates several
policy alternatives and estimates their effectiveness at mitigating the negative impacts of the investment tax credit cliff embedded within current law.
Running head: MEANING OF BAILOUT
1
MEANING OF BAILOUT
4
The Meaning of…
Bailouts Are a Good Thing
First Last
College Name
Abstract
This essay explains how the meaning of the word “Bailout” has been changed to refer to something as disgraceful or shameful, instead of referring to something in a positive context, such as the benevolent act of helping another in trouble. The subject of “bailouts” is explored against the background of the financial crisis of 2008. Points, counterpoints, and rebuttals serve to examine both of the ways in which “bailout” is used, and proof is provided to reinforce why the term should only be used with a positive connotation.
The meaning of the term “Bailout” has been changed into a politically-charged perversion of what is actually a noble act of lending help to another. In the article “Bailout Baloney” by Justin Quinn (2008), the term “bailout” is used to describe any government monetary assistance program, such as the Recovery Act
, with the negative connotation of rewarding fiscal ineptitude. It is implied that this “reward” is wasteful and inefficient by spending precious government resources on the dysfunctional business model of a failing industry
at the expense of the American taxpayer population. But the Oxford Dictionary describes a “bailout” as “an act of giving financial assistance to a failing business or economy to save it from collapse” (Bailout, n.d.). Saving our economy from collapse is never a bad thing. A “bailout” is an emergency countermeasure, when a situation is so desperate that this last resort must be used to prevent further harm. The financial assistance or “bailout” that the U.S. Government provided to the banking industry in 2009 was necessary to protect the fragile state of the U.S. economy from a catastrophic economic collapse, something that an over-reliance on free-market principles is unable to do.
Government “bailouts” are a way to protect the major players in our vital industries, and even the U.S. economy itself, in times of financial crises. The Merriam-Webster dictionary (Protect, n.d.) defines the term “protect” in this context as “to maintain the status or integrity… especially through financial or legal guarantees … as to save from contingent financial loss.” In the past, when national or global factors threatened to harm the status or integrity of the U.S. economy, the government provided financial assistance in order to bolster specific companies or institutions (Smith, 2011). This was done to stimulate short-term liquidity and solvency of those industries because they were interconnected to many other economic sectors. To help these types of companies would be to help the economy as a whole. These “bailouts” did just that, saving the major players in these industries from contingent financial loss, which produced an overall positive economic effect for the country.
Fiscal conservatives would argue that we should not invest so much to save failures, an.
BUS626 Week 3 - Discussion Forum 2ResponsesGuided Response .docxfelicidaddinwoodie
BUS626 Week 3 - Discussion Forum 2
Responses
Guided Response: In your response, take the opposing view of the original post regarding national debt. Respond to at least two of your fellow students’ and to your instructor’s posts in a substantive manner and provide information or concepts that they may not have considered. Each response should have a minimum of 100 words. Support your opposing view by using information from the week’s readings. You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum.
Below are two classmates with discussion that need response. They are Lisa Schreiner and Jason Stack
Lisa Schreiner
A deficit is the gap when spending exceeds budget. A surplus is the gap when budget exceeds spending. The debt is an accumulation of deficits less surpluses over time. The large and increasing national debt is definitely an issue we should be concerned about. Persistent increases in debt could lead the US to a failed economy with low credit ratings from Moody’s, and a call on loans we cannot pay. During a recession, the deficit (debt overall) will increase as the US borrows funds to cover the spending gap. During an expansion, the US should decrease spending producing a surplus to lower the overall debt. In recent years, the economy has been running in expansion mode, but yet the government continues to spend, increasing the deficit and debt. This is not a sustainable practice. According to the Committee for a Responsible Federal Budget (2018), “Running large deficits when the economy is already strong means that any boost provided to the economy will be temporary, and may put unnecessary upward pressure on inflation and interest rates. Running permanent deficits means that they will increasingly hurt investment and growth over time. They cannot simply be waited out. Rising deficits are largely driven by the increasing cost of interest and health and retirement programs, which are caused by rising health care prices and an aging population. Yet even with these factors, deficits were on course to decline over the next couple years before Congress enacted fiscally irresponsible tax cuts and spending hikes” (para. 12-13).
John Tamny views the national debt as a give and take, noting we are better off to have the government spending less with some debt than the government spending more and having no debt. John discusses limiting the government’s control on spending and investing into the private sector, generating technological advances and innovation to grow the economy (Tamny, 2020). After reviewing several articles and watching videos in the recommended reading section for the week, I agree, this is an issue and controlling government spending is part of the process. There are four programs consuming a significant portion of government spending: Social Security, Medicare, Medicaid, and ObamaCare. According to PragerU (2014), “to cut spendi.
Gary Trennepohl on "Financial Markets in 2011," during Reynolds Business Journalism Week, Jan. 7, 2011.
For more information, please visit businessjournalism.org.
ECONOMIC COMMENTARY Number 2014-09May 8, 2014Why Do Econom.docxtidwellveronique
ECONOMIC COMMENTARY Number 2014-09May 8, 2014
Why Do Economists Still Disagree over
Government Spending Multipliers?
Daniel Carroll
Public debate about the effects of government spending heated up after record-large stimulus packages were enacted
to address the fallout of the fi nancial crisis. Almost as noticeable as the discord was the absence of consensus among
prominent economists on the issue. While it seems a simple problem to estimate the effect of government spending on
output—the size of the government multiplier—it is anything but.
ISSN 0428-1276
Over the past several years, attention has focused on the
dangers of medium- and long-run imbalances in government
budgets. This was less the case at the beginning of the
recent fi nancial crisis, when the question was if and how the
government should try to stimulate the economy. But before
long, the debate surfaced. Some argued that the government
should prop up falling private demand with increased
spending. Others claimed that increased government
spending would have little to no stimulative effect in the
short run and that it might even be contractionary.
Economists could offer little in the way of clarifi cation, with
venerated scholars falling on both sides of the debate. This
failure of economists to agree on the issue leads some in
the public to suppose that economists are incompetent, or
perhaps worse, politically motivated.
The truth is that economists have struggled to answer
the question, “What effect does an increase in government
spending today have on output in the future?” In economics,
this effect is called the government spending multiplier,
and unfortunately for those of us who would like certainty
on the matter, there are major challenges associated with
measuring it. An appreciation for these challenges should
explain why competent scholars can hold widely different
opinions about the effect of government spending on output.
Measurement Challenges
Problems with measuring the government spending
multiplier begin at the outset—with the way the question
itself is phrased. At fi rst, it seems like a natural question,
but in fact it is far too general.
For starters, it is presumptuous to speak of “the”
government spending multiplier as if there is only one.
Because a change in government spending is likely to
infl uence output over multiple periods in the future, separate
multipliers could be created for each period. To calculate
the appropriate multiplier, should we look at how much
output changes one quarter in the future? One year? Five
years? There is no universally accepted answer. Some studies
report a collection of multipliers over a specifi c time period
(for example, a multiplier for each quarter up to three years).
Others average these numbers or report a range.
Taking a stand on timing is not suffi cient however. One
must also consider what type of government spending
is increased. Surely an increase in milita.
The current book provides and analyse the existing insurance market in India. It is a throughout study of Indian insurance with exact data archived from IRDA and Trustworthy Financial institute of India.
This book Provides the complete specification and integration required to reach the vision 2025 in prudent understanding.
1. Heamon Williams
Prof. Richardson
Finance Project Individual Paper
Solar Subsidies
4/11/16
What is a subsidy?
A subsidy is a benefit given by the government to groups or individuals usually in the form of a
cash payment or tax reduction. The subsidy is usually given to remove some type of burden and
is often considered to be in the interest of the public. Politics play an important part in
subsidization. In general, the left is more in favor of having subsidized industries, while the right
feels that industry should stand on its own without public funds (Investopedia.com). Solar
energy is only an attractive option due to its cost saving benefits in the minds of the rational
consumer, who worries more about the money they will save, than the environmental impact
they have. Right wing politicians tend to feel that subsidies give an unfair advantage to
companies that receive them. This ethical argument whether or not to subsidize certain
industries will be discussed later in the paper after we deal with the current state of solar
subsidies today in 2016. For now all one needs to understand that if you go solar you receive
not only a free installation covered by the state (varies state to state exactly) but a tax break in
addition to the ability to sell back any unused energy for a further reduction in cost. This three
part package in essence is the government subsidy to the solar industry.
What is happening to Solar subsidies?
The solar investor tax credit (ITC) was scheduled to run out in 2016. However in December of
2015 Congress passed an extension for this tax provision. Under the legislation, the 30 percent
2. ITC for solar will be extended for another three years. It will then ramp down incrementally
through 2021, and remain at 10 percent permanently beginning in 2022 (Bloomberg SEIA). This
was one of Congress’ biggest fiscal policy moves in recent years in an attempt to stimulate the
economy. This move was well timed because the economic reverberations a solar energy
collapse would generate would wreck our economy at a time when it is still recovering from the
’07-’08 recession. As evidenced by the market’s slow response to a rise in interest rates in early
2016, our economy is not ready for any more stress to be put on it. A collapse of solar energy
due to a lack of subsidies would certainly bode ill for the markets and investors. For a clearer
look at what could have happened had Congress not intervened is evidenced by the following
graph, which shows the drop in solar project levels predicted (Provided by Bloomberg Solar
Energy Industry Association).
3. This drop would cut investment in solar energy projects by about 70 percent! A drop that large
in an industry would be reminiscent of the dot.com bubble that burst in the late 90’s/early
2000’s.
But why would a drop in solar installations really impact our economy so hard? The
answer lies in the loss of potential jobs solar installation creates. According to SEIA Bloomberg
an estimated 100,000 American jobs will be lost without an extension on the ITC in 2017.
80,000 of these jobs will be in the solar field with 20,000 estimated lost jobs in related fields
and these numbers are only for the year 2017. The economic impact several years down the
line has the potential to send unemployment back to 2008 levels. Investing too, will slow
without an ITC extension. According to the SEIA: “Total investment in the U.S. economy from
solar during 2016-22 is projected to be more than $124 billion, $39 billion more than if the ITC
expires (SEIA Bloomberg).” Basic economics tells us that as investment slows so too does GDP.
During this period of global turmoil, in terms of market stability, cutting our GDP growth would
be equivalent to cutting off our right arm. The solar energy industry, as well as other
renewable sources of energy, are key components to driving our economic growth. The race to
find alternatives to non-renewable energy sources that do not endanger our environment is
one that our generation can’t afford to lose. Not only does our economy hang in the balance,
but so too does our future as a species on a planet that until several decades ago we cared very
little about. To cut subsidies to solar installations would be to cut down our economy at a time
when it is vulnerable.
Why does Solar get special treatment?
4. The aforementioned disagreement politically about the ethical basis of subsidies is one
that divides the democrats and republicans seemingly against all the facts. First and foremost
those who do not support solar subsidies on the grounds that it is “special treatment” for an
underperforming industry conveniently overlook the subsidies other energy industries receive
as well. In The Conservative Case for Solar Subsidies article by the New York Times it is pointed
out that: “There’s nothing unique about the government’s support for solar. According to the
Congressional Research Service, total government support for the oil and gas sector over the
years dwarfs the amount of support for the solar industry (New York Times).” So it would
appear that the solar industry’s acceptance of government subsidies is simply a response to
keep its head above water. This can be thought of similar to a baseball player who uses
steroids because his only other choice is to be sent down to the minors for not performing as
well as the rest of the steroid-using league. Manny Frishberg echoes this sentiment in his book
Research Technology Management when he writes: “Indeed, subsidies for alternative energy
may simply level the field, given the level of government support fossil fuels have received.
Certainly the energy sector is not immune to government influence in any form, whether it is
oil, coal, natural gas, solar or wind. So, the fact that solar does have access to this investment
tax credit and direct spending is not out of step with the level of support that's given to other
energy sources, Indeed, the petroleum industry gets a wide range of government funded
benefits, including the oil depreciation allowance, federal drilling subsidies, and low-cost
mineral leases on federal lands (Frishberg 7).” Support from the government can come in
several forms from tax benefits to flat out government handouts (think bank bailouts) so why
5. should solar be punished for accepting one of the many ways in which the government acts to
stabilize our economy?
One might then counter with the statement: “If solar is so beneficial why is it not
reflected in the market value of each solar company’s stock price? The market is designed to
reflect accurately the true value of each company and industry.” To answer this objection I
would first say that the market is rarely an exact correct valuation of any industry, hence the
lucrative nature of buying and selling stocks that get “hot”. But moving past this obvious point,
solar energy has benefits that some people may overlook when valuing a solar company that
should be taken into consideration. Beyond the ability of solar users to add excess energy back
into the power grid, solar energy contains another major benefit to any society that embraces
it: environmental. Solar panel companies have an immense amount of positive externalities,
which can be thought of as social benefits that do not get put down on a balance sheet. The
New York Times article referenced earlier, discusses these positive externalities that the solar
industry contains: “Solar panels, and the companies that make them, are replete with such
benefits: They eliminate redundant power plants that otherwise lie idle, empower consumer
choice and have fewer negative consequences than most other forms of energy. But markets
don’t always reflect these, which is why it makes sense for subsidies to enter the picture (New
York Times).” In a sense, government subsidies are a balancing act meant to counteract the
inherently profit centered tendency that investors and consumers have. When deciding
whether or not to purchase solar energy for one’s home, one is most likely to pay more
attention to the price and money that can be saved, than the jobs one is creating or the positive
environmental impact of the decision. To help make the cost savings worthwhile in a
6. consumer’s eyes the government subsidizes solar energy in the form of tax benefits should you
install solar.
Alternatives to Government Subsidies
Money can come from alternative sources than the federal government. Wealthy
private investors have the capital necessary to keep the industry afloat through 2020 should the
government subsidies fall through. Also financial intermediaries have enough clout to step in to
save solar. The financial power of Wall Street certainly is large enough to fill the gap that would
be left by a reduction in subsidies. The solar industry itself is at a point where it may outgrow
the proverbial training wheels of subsidiaries by the time this renewal runs out. Due to
increasing technology, the cost of not only installation but technological advancement in the
form of more efficient panels is driving the cost of solar down. By 2020 according to Lazard’s
Levelized Cost of Energy Analysis, Version 9.0 (PDF), the cost of solar will have reached a par
with unsubsidized gas. This is the tipping point that solar has been waiting for to leave the
subsidies behind and stand alone as a viable energy alternative that consumers can really trust
to be around for the long term. The current plan does contain a form of leveling off that is
designed to allow the economy to avoid the “boom and bust cycle that would occur as solar
prepared to stand on its own (Lazard 3).” Through a gradual decline analysts can track the
economic effects of an ITC slowdown on the solar industry as well as other effected industries
as opposed to a sharp cutoff in the form of a non-renewal of the ITC law.
Where are we today?
With the three year extension of the solar ITC, economic growth looks stable over the
next five to ten years according to MJ Shiao who is the director of solar research at Greentech
7. Media. Business groups and analysts say the extensions will support tens of billions of dollars in
new investment and hundreds of thousands of new jobs throughout the U.S. “There’s no way
to overstate this -- the extension of the solar ITC is the most important policy development for
U.S. solar in almost a decade (MJ Shiao GMT.com).” Shiao goes on to state “the ITC extension
will help spur nearly 100 cumulative gigawatts of solar installations by 2020, resulting in $130
billion in total investment. More than $40 billion of investment will be directly attributable to
the passage of the extension.” Clearly despite the disagreement between the left and right the
correct choice economically has been made. Of course the only true way to tell whether the
industry will live up to the predicted numbers is to wait five years and revisit this issue.
8. Citations
The Conservative Case for Solar Subsidies - The New York Times. (n.d.). Retrieved from
http://www.nytimes.com/2016/01/05/opinion/the-conservative-case-for-solar-
subsidies.html?_r=0
Subsidy Definition – Investopedia. (n.d.) Retrieved from
http://www.investopedia.com/terms/s/subsidy.asp
Frishberg, Manny. Research Technology Management. 2nd ed. Vol. 57. Industrial Research
Institute, 2014. Print.
Lacey, Stephen. "Congress Passes Tax Credits for Solar and Wind: ‘Sausage-Making at Its Most
Intense’." Web. 15 Mar. 2016.
"Congress Extends the Renewable Investment Tax Credit: What Now." GreenBiz. Web. 15 Mar.
2016.
"Energy Subsidies." Downsizing the Federal Government. Web. 22 Mar. 2016.