Solar Power Flame Out
The real story is that green manufacturing, which was supposed to be the planet's salvation and Europe's new industrial base, proved to be as vulnerable to low-cost competition as many other industries. Far from creating a sustainable comparative advantage, German subsidies sparked the very rivalry now putting its home-grown industry out of business.
The Italian government appears to have taken note of these economic realities and last weekend said it would slash "excessive" subsidies for solar and wind power. Industry Minister Corrado Passera uttered the obligatory promise that Rome remains committed to generating a carbon-free, wind- and sun-powered economy, but that "we need to do so without overreliance on taxpayer resources."
If he sticks to that standard, Italy may soon see the layoffs and bankruptcies that have hit Germany. Given Italy's 9.3% unemployment rate and recession, the solar flare-out will be especially painful there.
Would that the Obama Administration showed similar sense. U.S. taxpayers only narrowly avoided shelling out for Solar Trust: Last year the company received a conditional commitment for a $2.1 billion loan guarantee from the Department of Energy, but Solar Trust said it backed out in August of its own accord.
The Administration's recovery.gov website lists five pages of other solar projects, with current and future loans worth hundreds of millions of dollars. Even after the $535 million Solyndra debacle, cheerleaders in Washington still insist these projects are the key to America's economic and energy future. As with so much else these days, Europe is showing what that unhappy future looks like.