Have a Nice Day

"the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop."

Sadly, it is not a no-brainer good deal for the tax payer who ultimately pays for it. It is all well to have the biggest solar power industry, but what if it is all just virtual and breaks down once the subsidies stop?

The title is politically loaded. There's something that article is trying to say vis-a-vis government subsidies and free trade, but it never quite materializes, at least I couldn't understand it. But I had no trouble understanding the political outrage it is dripping with.

Importing solar panels from China is not even remotely similar to importing oil from the Middle East. If we derived our energy primarily from solar power, we wouldn't need a constant stream of solar panels to keep doing it, the way we need a constant stream of oil now. Also, since the company that makes the machines that makes solar panels, we could easily start producing them for ourselves if China suddenly decided to increase the price the way OPEC has the power to do with oil.

I don't understand why Friedman would prefer to produce solar panels in America than ship them from China. Trading between nations makes sense for the same reason trading between individuals makes sense: specialization is efficient, leading everyone to greater wealth.

He mentions that China will have a great export platform in renewable energy technology as the world adds 2.5 billion more people. So he's anticipating future demand. It seems to me that that is useful information for entrepreneurs, but it's nothing that demands government action. If entrepreneurs decide it would be profitable to supply that impending demand, then they will. If the government has to subsidize to make that happen, then maybe it shouldn't happen.

Just because there will be future demand for something doesn't mean we need government action to supply it. I'm sure those billions of people will want pants and meat and toothbrushes too, but there's no particular reason why America has to be the place to produce those. Just let people produce whatever they decide is most profitable for them to produce, and we're likely to get a more efficient outcome than one decided by central planning.

I think solar energy is great. If we want it, all we have to do is worry about the demand side, not the supply side. That is, consumers and governments should buy the best, cheapest solar panels available. I don't think it matters where the production, or the R&D, happens.

He suggests that trading solar panels with China might be similar to trading oil with Saudi Arabia. I don't understand why. Trading with Saudi Arabia is considered a problem because the money is thought to fuel terrorism. China doesn't have the nicest foreign policy on the planet, but I'd love to make them more rich, not less, because they seem to be becoming more peaceful as they grow richer. And if China ever starts funding terrorism, it is much easier to set up new solar panel factories than it is to set up new oil fields.

"If we want to launch a solar industry here, big-time, we need to offer the kind of long-term certainty that Germany does..."

The problem here is that there are no long-term certainties in a free-market economy. Providing energy is a competitive business and if solar energy is to grow it has to be a better choice for the consumer economically than the current alternatives at the true unsubsidized cost.