Solar Power's Subsidy Addiction

The solar power industry is using fears about jobs heading to China to push for even more subsidies.

Have you ever seen a story more nakedly dictated by self-seeking industry sources than this morning's piece in the NYT on the need for bigger subsidies to manufacturers of solar panels?

Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun.

Before panicking over the risk of a Chinese solar panel embargo, consider this:

1) A story whose message is that manufacturing can move in the flash of an eye from the US to China should not try to persuade us that - once moved to China- this allegedly ultra-mobile industry can then never move again.

2) Of all forms of encouragement to innovation, direct subsidies to particular firms is the worst, most inefficient, and most corrupting. If the Chinese are doing it, then the outlook is bleak for them.

3) The Chinese don't actually use much solar energy themselves. Too expensive .They use coal and are shifting to nuclear. The panels are for export, to countries that subsidize utilities who make use of them. In other words, the economic function of solar panels is not to tap energy from the sun. It is to tap subsidies from the Treasury.