Billions of taxpayer dollars are being thrown at green energy projects in the form of subsidies and tax credits by the federal and state governments. Government is using taxpayer money in financing a high-risk bet that green energy will be successful in replacing fossil fuels that provide the majority of energy that Americans use to power their factories, heat their homes and fuel their vehicles.
A recent announcement that Solyndra, a Silicon Valley solar-panel maker, will shut down an older plant and lay off workers after receiving $535 million in federal aid shows the financial risks of green energy projects. Company officials cite intense competition from Chinese manufactures as a prime reason for cutting their former production estimates in half.
Chinese competition is not the only challenge facing green energy projects. Government subsidized green energy projects are running headlong in to resistance from state regulators that are balking at passing on the higher costs of green energy to ratepayers in their states. The New York Times reported that deals to purchase renewable power have been cancelled or slowed in several states, including Florida, Idaho, Kentucky, and Virginia. According to the American Wind Energy Association, year-to-date installations of new wind power dropped 72 percent from 2009 levels.
Alternative energy is more expensive, sometimes significantly so, than energy derived from conventional sources. Increasingly state officials are more reluctant to strap households with higher energy bills and cause businesses in their states to be less competitive because of those higher costs.
Michigan officials would be wise to follow the lead of other states that we compete with for jobs and protect Michigan consumers and businesses from higher green energy costs. A good place to start is repealing the Michigan's 10 percent alternative energy mandate.