|Economically sound projects often need investors,
but they never have need of subsidy. The distinction here is fundamental:
investors expect to get their money back along with some margin of profit;
subsidizers throw money at a project for reasons they conceive as "the
right thing to do," but do not expect any financial return.
Actor Paul Newman, for example, subsidizes "The Hole In The Wall Gang Camp," a facility in Northeastern Connecticut to help children with frequently fatal diseases. He also donates all of the profits from his Newman's Own brand of salad dressings to charity. We applaud his benevolence.
More often than not, however, people prefer to subsidize their favorite projects using other people's money - taxpayers' money.
There is yet another kind of subsidy. Wealthy people will install solar collectors (even photovoltaics) on their homes as a holier-than-thou statement that they are "protecting the environment." All they get in return is a tax write-off that is not enough to pay for their solar toys.
The gullible parrot Susan Reed at CNN News Network (cnn.com.US/9810/17/solarhome.tour), swallows the blissful pro-solar statements of Susan Le Fever of the American Solar Energy Society: "You don't have to be a hippie, you don't have to be a millionaire. You just have to be somebody who's interested in saving money or taking care of the planet." [emphasis added]
Wait just a minute! Who could be in more need of saving money than the poor? Families living in poverty have every interest in saving money on heating fuel and electricity. Well, they can't afford the capital cost, can they?
Still, we have millions of investors looking for a good return on their money. That is, there is a huge amount of money available to supply the capital costs the poor can't muster. Why doesn't somebody set up a corporation to invest in solar collectors for these poor folks (better yet, for middle- class folks, who have more money to spend), thereby to save money for the utility customers and to make a profit (by charging for the energy delivered) at the same time?
Because they would get precious little return on their investment, that's why. Nobody is going to make big investments in solar toys that produce piddle power.
CNN's correspondent Susan Reed must be intellectually inert, highly overpaid, or independently wealthy. She writes "Solar systems can cost around $25,000. But the upside is that, with a solar generator, the electric meter runs backwards as a homeowner generates power rather than paying for it."
But, CNN isn't known for their logic. They ran an article (http://cnn.com/EARTH/9604/28/power.house/index.html) by correspondent Natalie Pawelski describing a morally superior solar household in the north Georgia mountains - somebody's second home - that is surrounded by 20,000 acres of wilderness. The home has solar collectors in addition to a $15,000 hydropower installation that makes use of a stream 600 feet away.
Word has it that Pawelski has spent the last two years trying to get a stream diverted to near her home so that she can dam it up for power for herself. "Everybody should have a stream, even for their first house! Let's get everybody off the power grid!"