By Rebekah Rast
Video by Andrius Vaitekunas and Rebekah Rast
Solar-cell manufacturing in Frederick, Maryland, dates back to the mid-1970s. BP Solar, one such company, was so profitable it was in the middle of building a $97 million expansion to create more jobs in the solar panel industry. Now the BP Solar building is being demolished and 320 people in Maryland are unemployed.
The answer is, the federal government got involved and destroyed the free market generated profitability of the making of solar panels. Here’s how: the Obama Administration has spent billions of dollars to create “green jobs.” Through his tax incentives and credits for those businesses that manufacture renewable energy products, he created a glut in the marketplace. With so many businesses now producing solar panels (most of them overseas in anticipation of a booming U.S. market), the cost of panels has been nearly cut in half, making it impossible for businesses like BP Solar to stay in business in the U.S. In an effort to create green jobs, hundreds of green jobs that had been around for 30-plus years were lost. Ironic isn’t it?
Because companies like BP Solar can’t survive in the U.S. anymore, due to the market being over-inflated with far too many subsidized companies creating a surplus of solar panels, they move to where business is more cost effective. Places like China, India, Mexico and Poland, where less overhead, lower labor costs and fewer taxes make for a friendlier business environment. Businesses in the U.S. pay huge corporate and property taxes, as well as absorb skyrocketing energy costs. Even if the government subsidized BP Solar, like it has done with so many other green industries, it would not have been enough.
Bill Wilson, President of Americans for Limited Government flatly states, “The market is no longer sustainable because of the glut caused by the overproduction of solar panels. This is a problem unless the government plans to subsidize these companies forever.”
Not only is the U.S. hard on businesses to begin with, but by meddling in the free market, the federal government has made conditions far worse — for everyone.
“320 jobs. That is absolutely absurd,” says Audrey Scott, former Secretary of Planning for the Ehrlich Administration, about the number of jobs lost at BP Solar. “In the Western part of the state jobs are a very critical issue. It’s all about jobs, jobs, jobs.”
You can lay some of the blame of the closing of BP Solar on the State of Maryland’s laws and regulations. Other businesses have left the state and moved to Pennsylvania or elsewhere to more business-friendly environments.
“Maryland is very anti-business and that is one of our issues,” Scott says. “What our government is doing here in Maryland at the present time is getting in the way of the job creation. The regulations and the horrendous atmosphere and environment for jobs and for business here in Maryland are just unacceptable.”
Sound familiar? While Maryland’s drop in 2007 to 47th worse business tax climate, according to a nonprofit Tax Foundation report played a big role in BP Solar’s decision to close, the overall business climate in the U.S. contributed to the shutdown as well. It’s not only solar panels that are being manufactured overseas, it’s other renewable energies as well — even by those companies that received “help” from the federal government.
For example, of the $2 billion already spent on wind power alone, funding the creation of enough new wind farms to power 2.4 million homes over the past year, nearly 80 percent of that money has gone to foreign manufacturers of wind turbines. And wind energy is just another industry receiving some of money spent on this “green” initiative. There are still billions more dollars being spent by the federal government on this initiative.
Obama’s method of subsidizing these renewable energy companies and interfering in free market environments is not original. Spain is a good example of a country that has done exactly what Obama is trying to do. An Institute of Energy Research (IER)-commissioned study coming out of King Juan Carlos University in Madrid by Gabriel Calzada found that, for every green job created, 2.2 jobs in other sectors have been destroyed. Furthermore, Spain’s government spent $758,471 to create each green job and used $36 billion in taxpayer money to invest in wind, solar, and mini-hydro from 2000-2008. The country’s unemployment rate is currently at 19.4% and is nearing insolvency.
Does the U.S. really want to continue down this same path?
It is time to learn from the mistakes of others before it is too late. America is next in line to becoming insolvent, as ALG News has previously reported.
“It is lunacy to expect top-down, Soviet-style economic planning to work in America,” says Wilson. “It has failed all over the world. We need to let markets work. Before the government got involved, 320 Americans were profitably building solar panels in Maryland. Now, they are unemployed.”
When walking the streets of Frederick, Maryland, you sense sadness and frustration. Peoples’ hopes are replaced with despair. Maybe if the federal government would have left the free market system alone, BP Solar might have had a chance and continued to produce solar panels and more jobs.
Rebekah Rast is a contributing editor to ALG News Bureau. Andrius Vaitekunas is Video News Editor for ALG News Bureau.