William Goldman, a legendary screenwriter, made this observation about predicting the box-office success of movies before they open, but his comment could just as easily be made about projecting the success of specific renewable energy technologies before they are widely deployed. And that is why subsidising the deployment of individual renewable energy technologies—ie, picking winners—is a bad idea, both for fiscal responsibility and for the long-term health of the clean-technology economy itself.
This does not mean that governments should do nothing. The support for basic scientific research and even applied R&D is one of the few governmental expenditures that actually produces a good societal return on investment. Funding a broad and sustained clean-tech R&D effort by government, academia and even, subject to tight restrictions, within industry, makes a lot of sense.
But loan guarantees to private firms, whether those are Solyndra (bankrupt), Beacon Power (bankrupt) or Fisker Automotive (for a 20mpg hybrid sports car), is a bad idea. The Obama administration has tried to combine an energy policy, a stimulus policy and a jobs policy all in one with the net result being both policy incoherence and charges of corruption, incompetence and conflict of interest. As Larry Summers, then Treasury secretary, wrote at the time of the Solyndra investment in an internal e-mail: "Government makes a crappy VC."
(photo credit: Steve Jurvetson)
