Conflicting goals often lead to worse results. This is the case with solar modules and electric vehicles.
SunPower went bankrupt despite enormous subsidies
The Wall Street Journal reports another collapse in green energy subsidies
The 39-year-old SunPower is the latest rooftop solar company to go bust this year. Others include Titan Solar Power and Sunworks. SunPower cited a “severe liquidity crisis caused by a sharp decline in demand in the solar market and SunPower’s inability to raise new capital.” The IRA increased solar subsidies, so why has demand fallen?
One reason is that leasing options for rooftop systems have become less attractive to customers due to higher interest rates. Some states, such as California, have scaled back programs that pay customers to feed unused solar power into the grid. Such subsidies increase electricity costs for people who do not own solar systems. In California, the grid is often overloaded with solar power.
The cost of solar panels has also risen due to general inflation and tariffs passed by President Biden, which were supported by domestic manufacturers and Democrats in Congress. Solar installers warned the tariffs would hurt their industry, and that’s exactly what happened. Jobs that Biden’s subsidies create are being taken away by his tariffs and inflation.
Offshore wind projects are also being cancelled because rising costs and interest rates make them uneconomical even with subsidies. BP wrote down its US offshore wind business by $1.1 billion last year. Wind developer Orsted announced $4 billion in write-downs last fall after abandoning two projects off the coast of New Jersey.
BP recently scaled back a planned investment in biofuels in the US. Shell announced this year that it would close its hydrogen stations in California because few people are buying fuel cell vehicles and subsidies for hydrogen production have declined. One could speak of stranded assets.
Tariffs and subsidies are a failure
Biden only wants clean energy if it is produced entirely in the United States. That means higher costs, even with subsidies.
I commented on this in advance as it was easy to spot.
The attempt to push the production of solar modules in the USA resulted in prices so high that few people wanted them.
Three results
- No noticeable increase in US production
- Lost jobs for installers
- No support for clean energy goals
Ford loses $100,000 on every electric car
Despite subsidies, Ford loses enormous sums with every electric car
- According to one report, Ford loses more than $100,000 on each electric vehicle.
- Ford is reducing spending on electric vehicle manufacturing plans by $12 billion.
- It is estimated that Ford will lose $5.5 billion on its Model E division in 2024.
Either you want faster adoption of electric vehicles and clean energy projects, or you don’t.
When companies insist on using only components made in the United States while infrastructure is lacking and demand is low, such losses can occur.
Unfortunately, tariff wars are ahead of us, no matter who wins the election.
