If you still own shares in solar energy it’s probably a sign that you’ve been in the sun too long: the sector is tanking – and deservedly so – as reality dawns that this is a Potemkin industry, an Enron of a con-trick, whose survival depends not on the energy it generates but on the subsidies it squeezes from the taxpayer.
Consider Exhibit A: the Ivanpah Solar Electric Generating System in the California desert. This $2.2 billion project, heavily backed with federal grants by the Obama administration, is absolutely brilliant at killing birds. According to some estimates it accounts for 28,000 a year (the workers at the plant nickname them “streamers” because they fall from the sky like burning comets), though the company denies this. What it’s not so good at is the job it was designed for: generating electricity.
It has failed to produce sufficient quantities of its exorbitantly expensive power (it charges between $135 and $200 per megawatt hour; the market rate for conventional electricity is $35 per megawatt hour) as required by its contract with PG&E Corp and may have to shut down unless bailed out by the California state authorities.
Exhibit B is the solar energy firm Abengoa, now on the verge of the biggest corporate collapse in Spanish history, after the Spanish government decided to turn off the subsidy tap essential to its survival.
This was the company that in 2010 President Obama was boasting about having lured to the US as though it represented some kind of major coup.