NJ Tries to Rescue Nonexistent Market for Solar Incentives

Here is something you never hear about the Oil Industry.

Hey folks,

Happy Tuesday to ya. Hope your week started out good. May you have a great rest of week. I'm going to try to. Since it is Tuesday, it's time to check in at the Energy Front. Lets talk about Oil. Oil Company ABC sets out to explore. They say to the government, "We want to explore X" The government says sure, pay us this amount, do environmental studies on the exploration process. They spend hundreds of millions. They find an area that they feel possesses enough Oil to make it worth the expense to attempt to drill.

They then go to the government, say, "We found a possible Oil reserve in location X." The government then says OK. For this amount, you can do more environmental studies, pay for permits, etc. Oil Company ABC pays the government more. They drill or use other means of extraction. If they are lucky, they were right, and they get oil, natural gas, etc.

Then they ship the oil or natural gas to refineries. Refine it. Then ship it out to market. Now we are talking about them spending billions. In some cases, hundreds of billions. If there is no oil? Company ABC loses out on all that invested money. If there is, people buy it. People then pay the government money {Taxes} to use it. As well as the Oil Company ABC pays government taxes on the entire process.

So Oil Company ABC spends billions. Makes billions if there is enough product. The government makes billions, regardless, for doing nothing. Then some want to call "Big Oil" recipients of "windfall profits" when truth is, the only ones receiving windfall profits IS the government.

So what is NOT in the example of what you just read? Government using your money to prop up Oil Company ABC. They either make money, or they lose money. But YOU have nothing to do with the process.

Now we have talked about the "Green Energy Market" or the lack of a market, plenty of times. We have talked about how this administration has spent billions of YOUR money on these "Green Companies" only to have them line the pockets of their executives and then fire people and go out of business. They produce nothing.

We have talked about this dynamic before as well. If I make product F, no one buys it, I go bye, bye. It doesn't maker how much someone gives me. They could give me a billion dollars. I could make billions of product Fs. However, that money will run out, and even if a have a warehouse full of Fs, if no one buys them, I still have no choice that to either accept more free money, or go out of business.

So lets talk about NJ.

The market that New Jersey officials set up to subsidize solar energy needs a rescue or there will be disastrous layoffs in the industry, business leaders, politicians and regulators say.

Those in the industry say if the government doesn’t step in to raise subsidy prices paid to solar panel owners, a bust in the market will kill jobs created in the last few years as New Jersey’s solar capacity has more than doubled, putting the state second only to California.

That market works because electric companies must buy solar credits, called SRECs, from panel owners, or produce their own solar power.

But SREC prices dropped dramatically in the last year after a boom in solar panels produced a glut of the solar credits, which are traded on a market.

The credits, once valued at over $600 each, cost a little over $100 on the spot market last week, according to Flett Exchange.

"Many, many jobs being lost, many good companies going out of business, and we don’t know why," warned Lyle Rawlings, head of the Mid-Atlantic Solar Energy Industries Association, which represents more than 100 companies in New Jersey. 

Wait. read that again? "Many, many jobs being lost, many good companies going out of business, and we don’t know why,"  Really? There is no market for it. Most either can not afford the start up cost to install these panels, or they do not want to. You do not know why? Seriously? If it was not for the tax payer money, these companies would have gone out of business long ago. Well, if not for tax payer money and government interference in the free market.

Now some in NJ want more. They want to use money of your money, interfere more in the free market, and prop up these companies even more. They do this with the hope, that one day, these will actually be viable on their own. Problem is, we are nowhere near this day coming. There is simply no real demand. There is no market.

Think about this also. The more people buy something, the cheaper it gets. Look at Phones. New Phone comes out it between $500 to a thousand bucks. Some will go out and pay that. Others than either can't or won't, will sit back and wait.  In a couple of months, they will go buy the same phone for $100 bucks. If you sell a product for $10.00 and you sell 100. You make a grand. If I can find a way to sell it for $5.00, I sell a thousand, you get the point.

So there was this "boom" in NJ. A "boom" of people buying into the whole solar thing. Don't be misled here, there really is not that many. But there was enough to drop the price of the credits from $600 to $100. However, they are not happy with this. They want to artificially inflate the price. Or force energy companies to buy more. Do you think this will help or hurt the nonexistent market place?

So to recap, Oil, Natural Gas, and yes, even Coal, stand on their own. They INCREASE Jobs. INCREASE National Security. INCREASE Revenue. Decrease costs of all for all. All this without a dime of your money, until you buy the product. "Green Energy?" Hundreds of billions of your money, that produce nothing. A handful of homes? Maybe? That hundreds of billions are lost. Jobs are lost. National Security is weakened. Revenue is lost. And the cost on everything continues to remain high. So what is the answer here?
Peter

Sources:
NJ.com - State officials look for path to rescue market for solar incentives Published: Sunday, May 13, 2012, 9:30 AM  By Eliot Caroom/The Star-Ledger