Governments are bankrupt. The financial management of the state's household has not only derailed, bailing out banks, subsidizing uncompetitive industries, and generous hand-outs are risking to enslave the citizens of industrialized nations into excessive taxation for decades to come. We seem to forget that the trillion dollar spending sprees of the past years associated with massive national budget shortfalls all have to be paid back by the citizens.
It is the addiction to subsidies that drains economies, diverts resources from productive and social objectives, while it distorts our view of competitiveness. While energy is critical, we have clearly have lost touch with reality. If and when energy is widely subsidized, from nuclear to coal, fossil fuels and renewables, then we are not making it cheaper, we only delaying payment! What appears as a discount is only a temporary reprieve. And, payback time will include interest, and interest on interest. How come? Because our governments spend more, much more than they can reasonably earn as income.
The culture of subsidy has evolved from a temporary measure to a permanent addiction. Coal in Germany has been subsidized since 1965, and this drain on the state budget only ends in 2018 - 53 years later. The political measure to soften the social impact of the demise of coal mines turned into a permanent revenue stream for the corporate world with the associated cost passed on to the tax payer. Is this the route solar and other renewable energies should take? Let us be transparent: solar and wind energies need subsidies since these are not competitive. The forced return of 8 percent on investments for 20 years -the norm in Germany- generated a huge demand for silicon wafer panels, but it did not build up a creative and innovative solar industry which mainly imports its components and panels from China.
Imagine the latest solar systems that offer both electricity and heat, that concentrate light onto a wafer more than three times, using both sides of the panel, cutting wiring to 25 percent. Only 8 units produce enough ambient heating, cooling, hot water, purified water, and electricity for a household of five in Sweden, at a cost of approximately 1.5 cent per kW/hr. At this rate, solar needs no subsidy. The faster these innovations are adopted by the market the quicker all energy subsidies will become obsolete, releasing money to support the good - like meaningful labor and absolute resource efficiency, pensions and the social sector, or funding the exit from an overly risky nuclear energy.
The aim of this blog is to present a fresh look at realities around us. Whereas I do not pretend to present the truth nor a definite position, I do wish to push the reader to think beyond the obvious. After all, time has come to dramatically improve the plight of millions, and that requires more than the predictable. Sometimes it forces us into spheres of discomfort.