Politics is in the air….. and on the air everywhere. Looking to check on the latest long range forecast today, I came across Carl Parker of the Weather Channel discussing the economics of the federal government promoting renewable energy. This must have been in response to last night’s debate when Donald Trump replied to Hillary Clinton’s comments on how the federal government needs to continue its push for renewable energy. Trump answered with the financial debacle of when our government gave funds to assist in a solar panel start-up. While he did not mention Solyndra specifically, he reminded the audience of the $500 million the failed start-up cost taxpayers a few years ago.1
Mr. Parker countered that federal expenditures have amounted to $34.2 billion for all renewable energy sources. He pointed out that defaults have amounted to a very low 2.28%. He added that revenue from all of these projects has put the federal government in the black by $30 million.
The tone in which it was presented and the tendency of many viewers to hear data without scrutiny made it sound as though this has been a good thing for us citizens.
But is it really? Earning $30 million on $34.2 billion over several years amounts to a total return of just under 0.9%…. How many civilian companies, not to mention financial firms, would have a chance of staying in business with that rate of return over just one year? Perhaps as the Republicans have suggested for a long time: when it comes to advancing new technologies, leave it to the entrepreneurs and don’t allow the government to try to pick winners.
1 – “Why the Solyndra mistake is still important to remember,” by Katie Fehrenbacher, http://fortune.com/2015/08/27/remember-solyndra-mistake/, 8/27/2015.