The folly of rushing into green energy schemes

Environmentalists, renewable energy advocates, and solar energy promoters tout the supposed benefits of solar energy. We know the problems: inefficient conversion of sunrays into electricity, intermittent energy generation, the NIMBY (Not In My Back Yard) reflex that prevents power lines and solar farms from being built; and the need for massive subsidies that would be better spent in other ways to generate power.

Even environmentalists have opposed massive solar farms that disrupt the ecology. Now comes another example of the manifold problems that result when promoters and politicians get together to concoct a solar power venture. This time, the place is a small town in Spain and the time is now:

Two years ago, this gritty mining city hosted a brief 21st-century gold rush. Long famous for coal, Puertollano discovered another energy source it had overlooked: the relentless, scorching sun.

Armed with generous incentives from the Spanish government to jump-start a national solar energy industry, the city set out to replace its failing coal economy by attracting solar companies, with a campaign slogan: "The Sun Moves Us."

Soon, Puertollano, home to the Museum of the Mining Industry, had two enormous solar power plants, factories making solar panels and silicon wafers, and clean energy research institutes. Half the solar power installed globally in 2008 was installed in Spain.

Farmers sold land for solar plants. Boutiques opened. And people from all over the world, seeing business opportunities, moved to the city, which had suffered from 20 percent unemployment and a population exodus.

But as low-quality, poorly designed solar plants sprang up on Spain's plateaus, Spanish officials came to realize that they would have to subsidize many of them indefinitely, and that the industry they had created might never produce efficient green energy on its own.

In September the government abruptly changed course, cutting payments and capping solar construction. Puertollano's brief boom turned bust. Factories and stores shut, thousands of workers lost jobs, foreign companies and banks abandoned contracts that had already been negotiated.

Even the New York Times owns up to the prospect this "cautionary tale" holds for America.

Subsidies fed the boom, which was unsustainable because solar energy is inefficient and uneconomic.

To encourage development of solar power and reduce dependence on fossil fuels, Europe has generally relied on so-called feed-in tariffs, through which governments pay a hefty premium for electricity from renewable resources. Regulators in the United States have favored less direct incentives like requiring municipalities to buy a percentage of their electricity from companies making renewable energy, although a few cities and states, most notably Vermont, are experimenting with the feed-in concept.

When it was announced in the summer of 2007, Spain's premium payment for solar power was the most generous anywhere - 58 cents per kilowatt-hour - with few strings attached.

But many of the hastily opened plants offered no hope of being cost-competitive with conventional power, being poorly designed or located where sunshine was inadequate, for example.

America has seen this story before. When ethanol became the rage due to mandates and subsidies, ethanol plants bloomed across the Midwest (helped by the fact that politicians like to cultivate the political landscape there). Now many have gone bust, scientists have come to doubt that there is any net energy savings in ethanol production, corn prices shot up thereby making food more expensive; fertilizer needed to grow corn has leached into water tables, streams and rivers; and the thirsty corn crop has helped to deplete aquifers.

We don't need lessons from across the ocean to teach us the folly of rushing into so-called green energy schemes. We have them in our own backyard.