In his state of the union speech tonight, President Obama again made the case for the US continuing to pour money into green energy investment programs. Like a gambler who keeps doubling down on a bad bet, the president is convinced that eventually this will pay off big time — no matter how many times it fails.
Four years ago, other countries dominated the clean energy market and the jobs that came with it. We’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year – so let’s drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we. (Emphasis added.)
A simple question for president: Why? Why must we follow China’s lead on this? How did they become the benchmark for what wise investment is? What is it about China spending more money on this that is supposed to be so scary?
This is especially bizarre because China green energy investments aren’t taking off either. As the Weekly Standard reported last month:
Chinese solar companies face a gloomy outlook. The industry may have reaped enormous government financial support that drew open envy from President Obama; but according to the state newspaper China Daily, numerous small and medium-sized solar cell manufacturers have gone bankrupt, and more than 80 percent of China’s 43 polysilicon companies have stopped production, as prices and orders have declined. China’s largest solar manufacturers are battling severe financial problems.
LDK Solar, the largest maker of solar wafers in the world, faces a mountain of debt totaling about $3.6 billion. Xinyu, the company’s hometown in Jiangxi Province, has come to the rescue. Last July, the city government approved a measure to fund approximately $80 million of LDK’s loans. Then in October, LDK raised some $23 million by selling a 19.9 percent stake to Heng Rui Xin Energy, a renewable energy company partly owned by Xinyu.
Suntech, the world’s largest solar panel maker, also needed a bailout from its local government. Burdened with over $2 billion of debt, it received nearly $32 million in emergency funds in September. The loan was organized by the city of Wuxi in Jiangsu Province, where Suntech is headquartered, and was extended by the local branches of state banks, including the Bank of China and the China Development Bank.
So if we were to really follow China’s example, we might actually be learning from their mistakes in this regard and how they apply to our own. Obama gave no indication that he is about to do that.
About the best thing that can be said about the president’s speech tonight is that he has dropped the rhetoric that these investments will create five million new jobs. That, needless to say, hasn’t happened.