NCPA - National Center for Policy Analysis

Clean Energy Can't Compete

January 20, 2011

The solar company Evergreen announced last week that it is shutting its Massachusetts plant and will lay off 800 workers.  That's the same plant Massachusetts Governor Deval Patrick had state taxpayers fund in 2007 to the tune of $58 million in grants, loans and land and tax incentives -- one of the largest investments in a private company in Bay State history, says the Wall Street Journal.

Evergreen blames its plant closing on competition from subsidized Chinese manufacturers.  However, Evergreen has also been subsidized in the multiple ways that federal and state governments favor solar power, says the Journal.

  • Bay State taxpayers are now stuck with the losses.
  • Mr. Patrick says he intends to claw back some of that $58 million, but Evergreen says it does not owe more than $4 million.
  • Taxpayers will also be thrilled to know the state is so worried about getting a new tenant for the manufacturing site that it may let Evergreen keep its sweetheart $1-a-year lease -- allowing the company to sublet it at a profit.

All of this adds up to one more case study in the perils of politically allocated capital.  Like President Obama, Mr. Patrick has advertised the illusion that governments can nurture new companies, even whole new industries, with targeted taxpayer "investments."  This is the entire premise of the "clean energy" industry, most of which wouldn't exist without subsidies because it can't compete on a market basis, says the Journal.

Source: "Solar Power Eclipse," Wall Street Journal, January 18, 2011.

For text:


Browse more articles on Environment Issues