Ashley Seager is managing director of AEA Solar GmbH. He was the Guardian's economics correspondent for five years and left in 2010.
For the more personally lucrative fields of taxpayer sourced subsidy? Certainly not.
The report from the Committee on Climate Change arguing that investing in renewable energy would eventually save consumers a lot of money is spot on.Oh? Tell us more Ashley.
We are regularly told by conventional utility companies, many politicians and commentators that energies such as solar and wind are hopelessly expensive and reliant on enormous subsidy.
But this is simply wrong.
Solar PV, the area in which my company operates, is a case in point. Three years ago firms like ours were paying about €3,600 per installed kilowatt of solar capacity on barn roofs in Germany. Today it can be done for just over €1,000 – a staggering 70% fall. That is seriously cheap and will just keep getting cheaper.Sorry, but did I just spot the “S” word and terms like “Feed in Tariff” and “Guaranteed Price” Ashley?
Newly built solar plants are already considerably cheaper than new nuclear plants per kilowatt hour of electricity produced and we are almost at the stage where we don't need a guaranteed price (known as a feed-in tariff) because solar energy will compete head on with conventional energy.
True, there is an ongoing cost from the German government's previous support for solar, but is much lower than the subsidies pumped by the western world into nuclear, coal, oil and gas over the past decades.
And solar is starting to pay its subsidy back. Germany now has more than 30 gigaWatt peak (gWp) of solar plants installed, such that on almost all days in the spring, summer and autumn, solar energy surges into the grid at a time when demand is at is strongest (air conditioning etc is running like mad) and when spot market energy prices are at their highest.Ashley doesn’t unfortunately reference the overall situation in the UK but luckily we already know just how successful Solar has been in the UK and how taking away the “someone else can pay” public subsidy has no impact whatsoever on that success.
11 comments:
Ashley Seager wrote some incredible pro LVT articles in the Guardian ,at a time when the land tax "movement" was in pretty bad shape morale-wise, (now ,believe it or not, is an upswing).He should be cut some slack.
DBC, yes he did, and that makes this subsequent betrayal even worse as it brings land value taxers into disrepute.
I'm sorry?
Air conditioning? Germany? Are we sure he hasn't just copied over some US stats?
The Germans dump that solar surge at zero cost into Poland FFS.
@MW As a parody, your remarks about bringing land value taxers into disrepute lack your wonted wit. Land Tax does n't have any repute to lose as the Welsh darts player remarked when charged when bringing his game into disrepute. (Don't get me started on Henry George!)
I would have thought that any new practical technology (disregarding pure science wastes of money like the large Hard-on Collider) would need subsidies until it can begin to pay its way. Look what a bollox this country made, pre-war, of subsidising the Fischer Tropsch process to produce petrol from coal. If the cost of all the wars we've fought to protect sources of oil were accounted a subsidy, an even slightly loss-making Fischer Tropsch industry would show an over-all profit.
Anyway what's wrong with subsidies?
If they come from governments writing unsupported cheques like the banks do with loans, there's no problem.
DBC: there is this little problem of crowding out what may actually be a viable and efficient solution to , and unintended consequences. "Picking winners" as it were.
If you believe CO2 is a problem, you tax and/or limit CO2, you don't back this one producer of electric cars instead of the other, same for solar producers. What's wrong with subsidies becomes very apparent when/if the subsidies end, as investments have been made, sometimes quite huge. Compare american "green fuel" initiatives (corn ethanol), that has shaped US agriculture for the worse for swathes of consumers. The only ones that benefit (it's not the environment) but is the cartel ethanol producers/grain buyers that are sitting on hugely expensive facilities. These subsidies are damn near politically impossible to end. It doesn't matter if you throw funny money at this, it's a very dumb thing to do.
Basic research has it's merits though, if we are to subsidise anything.
DBC, the Big Green people say that Big Oil is subsidised, maybe it is, maybe it isn't, but the subsidies are difficult to quantify and the taxes on oil extraction and petrol use are easy to quantity, and the latter outweighs the former by about ten-to-one.
The taxation of oil extraction and oil usage is pretty Georgist overall, so I'm not in the business of slagging off Big Oil.
" viable and efficient solution to whatever problem you seek to adres"
Kj, correct.
There's no harm in the UK government subsidising a bit of general research at universities etc, just to establish some scientific facts. A lot of this is dead ends, but at least we have learned that something does not work and then we try something else.
But this whole solar technology is all well-established, we know how to make solar panels, it works, on a practical level.
And now it's up to private businesses to make use of that knowledge and improve it and refine it and find cheaper ways of doing it etc.
So there is a massive difference between
a) paying a £100 million for scientific research and
b) paying £1 billion a year to loss-making private businesses.
Far too much of Mad Margaret economics around here: it does n't matter if some activities don't make any money and have to be subsidised as long as national wealth grows. Schools, hospitals, doctors ,the law ,the armed forces (all the things that matter basically) do not show a profit, much though the right wing neo- establishment that runs this country wishes they did. ( I can remember when you went to university for free and got a grant.) When Chamberlain was faced with the private sector chaos of Birmingham, he municipalised the private water companies that kept digging up the roads and stopped people using the very "ecological" private wells which were spreading typhoid. When asked about profit he said the profit was in the better health of the people. This was in the 1870's.We seem to have gone backwards since then into some Gothic twilight haunted by the reborn monsters of laissez faire.
If you were to think outside the box ,like all those terrifying quant jocks( who do the dirty work for the neo Establishment using the same computer programmes), aspire to, you might suggest having something called a nationalised energy industry that was able to cross subsidise further research into solar (sounds promising enough) from surpluses elsewhere in the system. Even if the whole industry made a loss (Chamberlain's initiatives always made money)this would only provide demand for the over-indulged private sector (Treasury: "Please do something, we've bet everything on you!")and would supply cheap energy anyway.
Why is it that technical innovation increases during wartime?
DBC, woah there!
The government is supposed to spend money on "things which benefit people in general" whether they make an immediate measurable financial return or not ("Schools, hospitals, doctors, the law, the armed forces").
You'll not find anywhere where I've said otherwise. of course, in the long run, these things are of huge net benefit, which can be measured in financial terms or not, according to taste.
But that is quite different from giving massive subsidies to small groups of favoured insiders (Big Green and the landowners who benefit from installing all this crap). There is quite simply a net overall cost to the economy and society in general.
MW Landowners benefiting from the clobber would get clobbered by a land tax.Dunno what Big Green is. Is it related to the rampant Statism and Guardianista Socialism that has Britain by the throat according to all the blogs?I look for it eagerly but it is always out of reach.
I did not suggest helping the usual suspects in the private sector: I was proposing energy nationalisation which would have the solar system sorted tout de suite.
Did you notice that the Advanced Passenger Train by which British Rail anticipated the Pendolino technology was given some prestigious award on 24th May; the Inter city 125 was a mere offshoot of this programme.
Renationalise quite a lot! Caroline Lucas is right.(Nationalised railways could be financed really easily by LVT: absent nationalisation and the revenue goes to shareholders in a local monopoly. Henry George was for rail nationalisation; in the US! He had his moments!)
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