On May 31, 2012, Governor Mitt Romney paid a surprise visit to the shuttered headquarters of Solyndra. Romney said, “Two years ago President Obama was here to tout this building and this business as a symbol of the success of his stimulus. Well you can see that it’s a symbol of something very different today. It’s a symbol not of success but of failure. It’s also a symbol of a serious conflict of interest.”

Today (June 14, 2012) we learn that the Solyndra bankruptcy resulted in 1,861 people losing their jobs, over 700 more than the bankrupt solar company previously reported. What has not been counted are the jobs that could have been created with the money Solyndra received. So the job loss count is even higher than 1,861, not the 1,100 originally reported. For the Department of Energy to guarantee Solyndra’s loan, the government had to extract the money from US taxpayers, so there is the opportunity cost of what the private sector could have done with the labor and the money given to Solyndra.

Solyndra also had, at the time of its closing in August, 2011, an unsold inventory of more than 23 megawatts of solar panels, enough solar panels to power about 23,000 homes. Plus, in January, 2012, we learned that Solyndra employees destroyed millions of dollars worth of new glass tubes used in solar panels. The glass tubes were thrown into dumpsters. More taxpayer money down the drain.

Subsidizing inefficient technologies with government guaranteed loans is an economic drain. If an energy source, such as the one Solyndra produced, is not economically competitive, then the government should not artificially prop it up to create a market that would not exist without the subsidy.

But that’s just my opinion.

Please visit RWNO, my personal web site.

In his effort to have 1 million electric, or “Advanced Technology,” vehicles on American roads by 2015, a budget document, entitled “Investing in Our Future,” discussed briefly by White House economic chief Gene Sperling, includes this goal. If that goal is reached and the new subsidy rate is enacted, the subsidy will cost $10 billion. Cars powered by natural gas are also considered as advanced technology vehicles.

But not to worry. Chevrolet Volt and Nissan Leaf sales are nowhere near that goal. The 2011 sales for both of them combined was 30000. In fact, General Motors’ goal of selling 10000 Volts in 2011 came up 3800 short. The Toyota Prius, which has been around since 1997, sold 13650 in 2011. Still, at the current rate of $7500 subsidy per car, we taxpayers shelled out $348.75 million. Bad enough! And at a time when we are over $16 trillion in debt.

The average yearly income of Chevy Volt owners is $170000, higher than Cadillac and Lexus owners, on par with BMW owners, and exceeded only by Mercedes-Benz owners. That yearly income puts the Volt’s buyers in the top 7% of American households. The obvious question is why do these buyers receive subsidies?

An unexpected occurrence has been the advance in the traditional internal combustion engine. Ford Motor Company is ending its hybrid version of its Escape crossover vehicle, saying a new model equipped with its EcoBoost engine will outperform the hybrid. It will be most interesting to see how the Obama administration spins this situation.

So while the average yearly income for the American family in 2011 is $63091, we continue to subsidize Obama’s goal. I think former British Prime Minister Margaret Thatcher said it best: “The problem with socialism is that you eventually run out of other people’s money.”

But that’s just my opinion.

What We Are Up Against

Justin Rolfe-Redding, a doctoral student at George Mason University, discussed ways for wind-energy proponents to get their message out. Rolfe-Redding said that polling data showed that “after reading arguments for and against wind, wind lost support.” Rolfe-Redding continued, “The things people are educated about are a real deficit for us.” After discussing the pros and cons of wind energy, he said, “enthusiasm decreased for wind. That’s a troubling finding,” suggesting the solution is to “weaken counterarguments” against wind as much as possible. He suggested using “inoculation theory” by telling people that “wind is a clean source, it provides jobs” and adding that “it’s an investment in the future.” He also said that proponents should weaken objections by “saying prices are coming down every day.”

Isn’t it interesting to see how similar arguments forwarded by wind-energy proponents are to those that the Obama administration used to justify the Solyndra fiasco?

The majority of the money for the Shepherds Flat wind farm is coming from federal taxpayers (over 65%), and will provide a boon for General Electric and its partners Google, Sumitomo, ITOCHU, and Caithness Energy. BusinessWire has an article on investor roles. BTW, GE’s president, Jeffery Immelt is head of Obama’s Jobs Council. Can anyone say “conflict of interest?”

From a memo written by Carol Browner and Larry Summers, we learn that Shepherds Flat investors will provide equity of about 11% of the total cost, but they will receive an “estimated return on equity of 30%.” Further, the carbon dioxide reductions associated with the project “would have to be valued at nearly $130 per ton for CO2 for the climate benefits to equal the subsidies,” which is “more than 6 times the primary estimate used by the government in evaluating rules.”

What Is NOW Being Built

The Shepherds Flat Wind Farm is an 845 megawatt (MW) wind farm under construction in Oregon. The wind farm is being built by Caithness Energy using General Electric (GE) 2.5 MW wind turbines, and it will supply electricity to Southern California Edison. In April, 2011, Google announced they had invested $100 million in the project. The wind farm is estimated to have an economic impact of $16 million annually for Oregon. It is supposed to be the largest land-based wind farm in the world when completed in 2012.

Here is what the Department of Energy (DOE) has to say about it.

What Will It Cost Taxpayers?

The Shepherds Flat wind farm is expected to cost a total of $2 billion, and it is getting $1.2 billion in DOE subsidies. After it provides 400 construction jobs, will provide 35 permanent jobs. That equates to $34 million per job. From an Oregon taxpayer perspective, granting Oregon tax credits of $30 million, it will take 77 years of tax revenues from the jobs created to recoup the initial tax credit investment, well beyond the expected life of the wind farm.

If we look only at the $490 million cash grant that will be given to GE and its partners when Shepherds Flat is finished, the cost of those 35 permanent “green energy” jobs will be about $14 million each.

DOE Picks (and subsidizes) Another Winner

While Congress take a long, hard look at green energy subsidies, they should also ask questions about the oversight and accountability. It’s not very encouraging that DOE cannot/will not say how many jobs are associated with the subsidies it continues to hand out. If we’re going to provide billions of dollars in subsidies for green energy, we should know exactly what we’re getting in return without having investigations tell us. Or is DOE and its loan guarantee program out of control?

But that’s just my opinion.