Alternative Energy Farce: US Taxpayers Subsidizing First Solar to Sell Solar Panels to Itself

From Washington Examiner (3/18/2012; emphasis is mine):

Firm sells solar panels - to itself, taxpayers pay

by Timothy P. Carney

A heavily subsidized solar company received a U.S. taxpayer loan guarantee to sell solar panels to itself.

First Solar is the company. The subsidy came from the Export-Import Bank, which President Obama and Harry Reid are currently fighting to extend and expand. The underlying issue is how Obama's insistence on green-energy subsidies and export subsidies manifests itself as rank corporate welfare.

Here's the road of subsidies these solar panels followed from Perrysburg, Ohio, to St. Clair, Ontario.

First Solar is an Arizona-based manufacturer of solar panels. In 2010, the Obama administration awarded the company $16.3 million to expand its factory in Ohio -- a subsidy Democratic Gov. Ted Strickland touted in his failed re-election bid that year.

Five weeks before the 2010 election, Strickland announced more than a million dollars in job training grants to First Solar. The Ohio Department of Development also lent First Solar $5 million, and the state's Air Quality Development Authority gave the company an additional $10 million loan.

After First Solar pocketed this $17.3 million in government grants and $15 million in government loans, Ex-Im entered the scene.

In September 2011, Ex-Im approved $455.7 million in loan guarantees to subsidize the sale of solar panels to two solar farms in Canada. That means if the solar farm ever defaults, the taxpayers pick up the tab, ensuring First Solar gets paid.

But the buyer, in this case, was First Solar.

A small corporation called St. Clair Solar owned the solar farm and was the Canadian company buying First Solar's panels. But St. Clair Solar was a wholly owned subsidiary of First Solar. So, basically, First Solar was shipping its own solar panels from Ohio to a solar farm it owned in Canada, and the U.S. taxpayers were subsidizing this "export."

First Solar spokesman Alan Bernheimer defended this maneuver, saying this really was an export, pointing out that First Solar paid sales taxes on the transaction.

But this subsidy undermines the arguments for Ex-Im's existence. Ex-Im, whose authorization expires May 31, is supposed to be a job creator, helping U.S. manufacturers beat foreign manufacturers by having U.S. taxpayers backstop the financing.

"It is critical that we encourage more American companies to compete in the global marketplace," Ex-Im Chairman Fred Hochberg said about the First Solar deal, saying the subsidy "will boost Ohio's economy, create hundreds of local jobs and move us closer to President Obama's goal of doubling U.S. exports by the end of 2014."

The implication here is that First Solar was "competing" with foreign solar panel makers in order to sell solar panels -- to First Solar.

This isn't the first time Ex-Im has subsidized companies selling to themselves. In late 2000, for instance, the ill-fated power giant Enron won a $132 million direct-loan package from Ex-Im (that is, from the taxpayers) in order to sell "engineering services & process equipment" to a Venezuelan power company owned 49.25 percent by Enron. Enron was both the buyer and the seller in a 1995 sale to Turkey that Ex-Im financed through a $250 million loan.

Enron's healthy feedings at Ex-Im's trough before its bankruptcy also help poke holes in another Ex-Im defense: that it operates at no cost to taxpayers.

Sure, as long as the foreign buyer pays off the debt, then Ex-Im's loans and guarantees don't increase the deficit. But Fannie Mae and Freddie Mac were profitable for years, too, before they failed and taxpayers had to bail them out. Once foreign governments and foreign companies start defaulting, taxpayers pick up the tab. At least one Enron deal resulted in U.S. taxpayers contributing to the Enron bankruptcy fund. Also, Ex-Im has ended up owning a 747 after Air Nauru failed to make its payments because the island nation's economy -- dependent on seagull droppings -- went under.

This week, First Solar unloaded its St. Clair solar farm to NextEra Energy, and so First Solar's financial troubles don't threaten to put the taxpayer on the hook for this deal. But the Ex-Im subsidy itself was a great case in point as to how national industrial policy pitched in the name of helping the U.S. economy often does nothing to help the broader economy, instead helping only those companies lucky -- or politically connected -- enough to get the handouts.

Obama, Reid and most of the Republican leadership want to reauthorize Ex-Im this month and boost the amount of debt it can have outstanding. The lobbyists at Boeing, the Chamber of Commerce and the National Association of Manufacturers agree. They'll claim Ex-Im is crucial to prosperity. And for a few companies, it is.

First Solar (ticker symbol FSLR) was a darling of Wall Street until about the beginning of last year. The stock's all-time high was in mid 2008 when it hit above $300 a share. By January 2011 the share price had dropped to about $150. Then, a tumble below $100 started in September 2011, and the share now trades at $26, less than one-tenth of the all-time high.

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Wind Power May Be A Health Hazard

Now that the climate bill (H.R. 2454) has passed the House and the U.S. is embarking on the brave new world of dramatic increase in alternative energy production, it may be wise not to repeat the same problems that the pioneers (Europe and Japan) have suffered. Here's one from Japan on wind power. The article appeared in Japan a year ago, along with flurry of reports about health problems caused by the windmills.

Wind power may have its own environmental problems (7/5/09 Physorg.com, translation from the article appeared in Japan's Yomiuri Shinbun)

"Shinjuro Kondo, 76, who moved into his Japanese neighborhood 17 years ago, said, "Stiff shoulders, headaches, insomnia, hand tremors... Since February last year, soon after the test operation of windmills started, I developed various kinds of symptoms."

"Kondo's neighborhood is about 350 meters away from a group of windmills. More than 20 percent of about 100 neighbors also complain of similar physical disorders. They said their symptoms become less severe when the windmills stop due to mechanical troubles and other reasons.

"Currently, the relationship between such physical disorders and the windmills is not clear. But infrasonic waves generated by the windmills' rotors is suspected to be the cause. The sound waves oscillate once to 20 times a second, a frequency too low to be heard by human ears."

The article goes on to say there is no research done on the infrasonic noise and human health. Not true at all. There are numerous studies in Europe regarding infrasound and its effect on humans.

What is infrasonic/infrasound? Infrasound is sound that is lower in frequency than 20 cycles per second, the normal limit of human hearing. Hearing becomes gradually less sensitive as frequency decreases, so for humans to perceive infrasound, the sound pressure must be sufficiently high. The ear is the primary organ for sensing infrasound, but at higher levels it is possible to feel infrasound vibrations in various parts of the body. (Wikipedia.org)

You may not hear infrasound by your ears, but the cells in your body may feel it and respond.

One experiment in England where "a team of UK researchers held a mass experiment where they exposed some 700 people to music laced with soft 17 Hz sine waves played at a level described as "near the edge of hearing"" The result? "The presence of the tone resulted in a significant number (22%) of respondents reporting anxiety, uneasiness, extreme sorrow, nervous feelings of revulsion or fear, chills down the spine and feelings of pressure on the chest." (Wikipedia.org)

And here's from an article that appeared in Asahi Shinbun on 1/18/09 (the article is in Japanese):

"Wind power is expected to be the next generation of renewal energy source. However, an increasing number of people living near the power-generating windmills are complaining about headaches, dizziness, insomnia, and other health problems. No definitive study on the cause, but it is agreed that these problems have to do with the sound emitted by the windmills nearby. More and more windmills are being installed closer to homes, which may be exacerbating the problems.

"Tsuyoshi Okawa, 40, and his family started to notice something was wrong in January 2007, immediately after the windmill nearby went into operation. Symptoms include numbness, headache and insomnia. The symptoms are relieved once they are far away from their house (and from the windmill), and come back as soon as they come back home.

"He had the noise level measured at his house. The result: his house was vibrating at a very low frequency (infrasound). He was told that there was no effect on health, but [since his body clearly says otherwise] he rented an apartment so that his family can escape there to get a decent sleep at night."

Once quiet farmland is now literally a nightmare for the residents suffering from insomnia, so that the city folks can claim they are using "clean" energy. All for the sake of preventing "global warming". For those environmentalists who argue it is still worth it, please consider what kind of effect it may be having for wild life. It is not just birds flying into the blades.

After all, very low frequency sound has been used as a deadly weapon.

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6/19/09 Today's Potential Power Transfers To Federal Government

Obama’s Insurance Proposal May Grab Power From States (6/19/09 Bloomberg)

"President Barack Obama’s plan to create a U.S. insurance office after the $182.5 billion bailout of American International Group Inc. may take powers from the states that have overseen the industry for more than 135 years."

Did you know that A.I.G. started in 1919 in Shanghai, selling insurance to the Chinese? It was not even an U.S.-based company until the People's Liberation Army under Chairman Mao started marching toward Shanghai in 1949 and the company moved to New York.

And the president is going to part the ocean, too.

Sean Corcoran's Cape Wind Blog (6/19/09 The Cape and Islands NPR Station)

"I want to mention a White House memorandum released last Friday to the heads of federal departments and agencies because it appears the Obama Administration wants to zone the oceans. The memo indicates that Obama is creating a task force that within 180 days will recommend "a framework for effective coastal and marine spatial planning." What's called The Interagency Ocean Policy Task Force will make recommendations to the president on protecting ocean and Great Lake resources as they experience "growing demands" from "renewable energy, shipping and aquaculture.""

OK, now, Marine Czar?

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Taxpayer subsidizing Paper?

Taxpayers Subsidizing Paper? (Econompic Data)

Paper mills, that is. Unintended consequence of supporting alternative energy, taxpayers ending up paying the paper mills for the process that they have used for long time without any government subsidy.

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