Europe Learns that Green Energy is an Economic Drain

I have noted before that “green energy” in Barack Obama’s agenda, is stretched enough to include natural gas from fracking. This was a smart move because fracking–mining natural gas–is an industry that has developed on its own, stimulated by nothing more than the chance to make a profit. No one started bringing natural gas to the energy market in order to save the environment. They did it because they knew it was valuable and that customers would pay money for it. Most or all other “green energy” has been developed through government subsidy.

But an energy source that requires more money to produce than people would volunteer to pay is not really an energy source but an energy drain. It takes from the economy more than it contributes to the economy.

Europe is now experiencing this fact.

From the Daily Caller: “Europe’s Green Energy Industry Faces Collapse As Subsidies Are Cut.”

European countries are cutting back their solar subsidies to rein in energy costs and cut debt. The solar industry in Germany, Italy and Spain are all facing huge problems due to subsidy cuts and power rate hikes.

The German solar demand is in freefall with only 818 megawatts of photovoltaic (PV) solar panels in the first five months of this year, a 45 percent drop from last year. This comes after a 60 percent decline in PV solar demand between 2012 and 2013.


Italian Prime Minister Matteo Renzi’s left-wing government has angered solar companies by proposing a 10 percent cut in power prices to spur economic recovery.

But the move intended to help struggling households and small businesses will lead solar companies to see their subsidies cut, reports Reuters. Renzi’s reform means solar producers will have to “extend the term of their subsidised tariffs from 20 to 24 years, effectively thinning them out, or accept a straight 8 percent cut.”


Spain new energy rates for green energy producers signal an end to subsidies for renewables that have been in place since the 1990s. The new rates are based on a “reasonable return” and are meant to rein in spiraling energy costs and an overproduction of green energy, reports Bloomberg.

The country became a poster child for green energy production after spending $68 billion (50 billion euros) over 25 years to boost wind, solar and other green energy generation. But subsidies and power costs spiraled out of control, costing the country more than $12 billion (9 billion euros) in 2013 alone.

So, essentially, green energy is a loser. Conventional energy is still cheap enough that it makes no economic sense to try to produce and offer green energy in the market. As soon as the subsidies are removed, the green industry companies face a crisis.