Wind and solar energy subsidies are experiencing drastic cutbacks in many European nations and some places in the United States.
In a radical change of policy, the Netherlands is reducing its targets for renewable energy and slashing the subsidies for wind and solar power. It has also given the green light for the country’s first new nuclear power plants in almost 40 years. Why the change? Wind and solar subsidies are too expensive. Holland thus becomes the first country to abandon the EU-wide target of producing 20 percent of its domestic power from renewables. (1)
Italy’s government passed a decree to stop solar energy and deep cuts in wind energy due to their high costs to consumers and technical problems integrating these sources into the existing infrastructure. (2)
Lawrence Solomon reports that December 2010 was a bad month for subsidies (3):
Spain slashed payouts for wind projects by 35% while denying support for solar thermal projects in their first year of operation. This latest round of Spanish cuts followed announcements in November that payouts for solar photovoltaic plants would be cut by 45%.
France announced a four-month freeze on solar projects and a cap on the amount of solar that can be built. These measures and others continue a retrenchment that saw industry payouts cut twice last year, and that will likely continue as opposition grows to France’s rapidly using power tax on electricity.
The German government announced it may discontinue the solar industry’s sweetheart tariffs in 2012. This latest announcement follows a surprise reduction in 2009 and another reduction to start in 2011.
Solomon also reported that in October, New South Wales, Australia’s most populous state, slashed by two-thirds the revenue that homeowners who had installed solar panels would receive from 60 cents per kilowatt-hour to 20 cents. New South Wales overnight went from being Australia’s most generous to least generous subsidizer. Also in October, the UK government announced that withering spending cuts were coming to renewable projects. (3)
Florida, Idaho, Kentucky, Rhode Island and Virginia either cancelled or delayed renewable energy projects
In the US, state regulators in Florida, Idaho, Kentucky, Rhode Island and Virginia either cancelled or delayed renewable energy projects that would raise rates for consumers. (3)
Thanks in part to the wind farm subsidies, Danes pay some of Europe’s highest energy tariffs—on average, more than twice those in Britain. (4)
In Spain, ‘green jobs’ can require a subsidy of $1,000,000 per job. Wind-related jobs in Denmark are subsidized at the rate of 175 to 250 percent above average pay, roughly costing taxpayers $90,000 to $140,000 for each ‘green’ employee. (5) Spain increased its electricity costs for households and small businesses 20% between January 2010 and January 2011. The government’s official explanation of this increase is the huge bill for renewables’ subsidies. Industry’s electricity costs have risen 110% and Spain has over 20% official unemployment. (6)
Extreme green Ontario is experiencing rate hikes 50 times greater than those countenanced in some US jurisdictions. (3)
Green jobs cannot reduce unemployment when they require significant government assistance. When the President and Congress talk about green jobs, they are talking about ones created via federal tax breaks, subsidies, or outright mandates. For example, wind and solar-generated electricity already enjoy subsidies nearly 50 times higher per unit of energy output than ordinary coal and 100 times higher than natural gas. (7)
Kenneth Green sums this up quite well: “With $2.3 billion in Recovery Act tax credits allocated for green manufacturers, President Obama and other Democratic politicians have high hopes for green technology. But their expectations clash with both economic theory and practical experience in Europe. Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy. Wind and solar power have raised household energy prices by 7.5 percent in Germany and Denmark has the highest electricity prices in the European Union. Central planners in the United Statestrying to promote green industry will fare no better at creating jobs or stimulating the economy.” (8)