Saturday, May 19, 2012

Misguided Mercantilism Hurts Solar Energy Consumers

The Obama administration has acted to protect Americans from cheap access to solar energy, imposing tariffs of 31 percent and even 250 percent on solar cells and panels imported from China.
As I noted previously, this case echoes one of the most famous documents in the history of free-trade literature, Bastiat‘s famous ”Candlemakers’ Petition.” In that parody, the French economist and parliamentarian imagined the makers of candles and street lamps petitioning the French Chamber of Deputies for protection from a most dastardly foreign competitor:
You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
We come to offer you a wonderful opportunity. . . .
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival … is none other than the sun.
Read it at Cato @ Liberty
Next, the Sun
By David Boaz
(h/t Don Boudreaux at Cafe Hayek)

This move has to be disheartening for those parties interested in moving the US away from oil and coal towards more 'green' energy. In order to support domestic solar producers and possibly add a few jobs in that industry, the Administration has raised the price of solar to consumers. This move is therefore also a win for oil and coal producers who are spared the tougher competition from Chinese solar companies. Imports represent real benefits, but that notion is all too often forgotten by both political parties. This is just one more example to add to the list of misguided mercantilism.

1 comment:

  1. A solar farm is an arrangement of a large number of solar panels which convert light energy from the sun into electrical energy without the use of any fuels. They are similar to centralized power plants, capable of generating electricity based on any amount of energy demand.