For more on the student loan scam, please see Budget Deficit Accounting Fraud and the Off-Balance-Sheet Student Loan Scam; Time to Scrap Entire Student Loan Program
Solar Energy Madness in Europe
In an effort to spur solar energy in France, Germany, Spain and other European countries, bureaucratic dunces decided to pay as much as 10 times market rates for those supplying energy to the power grid.
In response, farmers in France have started building "barns" that serve no other purpose than a place to put solar panels. Supermarkets put solar panels on their roofs and unused sections of parking lots.
It has been a boom to solar panel makers (China), but it is costing costing the French power company Electricite de France SA more than a billion euros ($1.3 billion) a year to meet government mandated pledges to accept solar energy from those supplying the grid.
At the end of 2010, EDF received 3,000 applications a day to connect panels to the grid. In 2008, the number of applications was 7,100 for the entire year.
The results should have been easy to predict in advance, but you can never explain anything to economic illiterates interfering in the free markets hoping to make things better. They never do.
Please consider EDF�s Solar �Time Bomb� Will Tick On After France Pops Bubble
France�s solar power boom that�s led to farmers building unneeded barns just to cover them in panels is costing Electricite de France SA more than a billion euros ($1.3 billion) a year as it meets state pledges to pay above-market prices for renewable energy.Politicians Never See It Coming
The cost is siphoning off funds from EDF as it plans to spend 35 billion euros to extend the life of France�s aging nuclear plants.
The tax shortfall will widen this year and last until 2017 even as the government moves to cool the solar rush, said Aurel BGC analyst Louis Boujard.
EDF shares have dropped 20 percent over the past year, compared with a 3.7 percent decline in Europe�s Stoxx 600 Utilities Index. The Paris-based company had net debt of $57 billion euros at the end of June, according to a company filing.
Elsewhere in Europe, governments have stepped in to contain spiraling growth in solar generation.
The Czech Senate introduced a temporary tax on solar producers in December, and Spain limited the hours during which existing solar parks can earn premium rates. Germany almost doubled the surcharge consumers have to pay in renewable-energy subsidies starting this year.
To end what it has called a �speculative bubble,� France on Dec. 10 imposed a three-month freeze on solar projects to devise rules that could include caps on development and lowering the so-called feed-in tariffs that pay the higher rate for renewable power. The tariffs were cut twice in 2010.
The French cuts haven�t slowed demand for new solar projects. EDF received 3,000 applications a day to connect panels to the grid at the end of last year, compared with about 7,100 connections in all of 2008, according to the government and EDF. France could reach its 2020 target of 5,400 megawatts of solar generating capacity by the end of 2011 if all proposed projects are completed.
France�s energy regulator estimates EDF will pay an average of 546 euros a megawatt-hour for solar power in 2011. That�s almost 10 times estimated spot market power prices of 55 euros, and the highest among renewable energy sources.
The promise of rich returns spurred suburban supermarkets to put photovoltaic panels in parking lots and farmers to install units on empty, purpose-built barns, according to a French parliamentary report.
�We just didn�t see it coming,� French lawmaker Francois-Michel Gonnot said of the boom. �What�s in the pipeline this year is unimaginable. Farmers were being told they could put panels on hangars and get rid of their cows.�
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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