The Sun Should Set on Solar Socialism

The irony of the years-long stream of government solar subsidies, epitomized by the ITC and the 1603 program, is that they may well have masked (and derailed) whatever potential solar power may have to augment the nation’s energy portfolio. These policies have induced solar investors and providers to view the programs as essential; however, they may also be an obstacle to the industry’s own progress. As watchdog groups have noted for many years, when government decrees winners and losers in the energy industry or just about any other economic sector, taxpayers all too often wind up carrying the losers.

What’s more noteworthy, though, is that pointed challenges to the subsidized status quo are coming from within the industry itself. Some solar CEOs seem to have been able to shake off the numbing effect of dependence on the government and have opened their eyes to the promising potential of a real, competitive playing field that does not depend on the kindness of taxpayers. They have broken ranks and are speaking out against perpetual subsidies.

Enphase Energy CEO Paul Nahi suggested in a February 14, 2013, commentary in Forbes that “subsidies are a useful tool to help establish an emerging industry. But where there is no projected end to funding, subsidies stop being a catalyst, and start becoming a crutch. This is especially true when companies supported by subsidies become powerful enough to influence governments to perpetuate their support. … Healthy companies depend upon sound business models in a competitive environment. Lousy companies that are limping along on subsidies will slow the growth of the industry.” He concluded that “a robust, renewable energy market will remain hampered if the energy industry continues to chase the next subsidy. For the good of our energy future, subsidies for all energy must eventually end.”

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