“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Friday, January 21, 2011

Solar Power Failure in Massachusetts

Tuesday's Wall Street Journal carried a staff editorial sounding a cautionary note on government investing in alternative energy.

The poster child in this case is Evergreen Solar, a one-time darling of Massachusetts governor Deval Patrick.

Patrick directed state funding to Evergreen in the form of "$58 million in grants, loans and land and tax incentives- one of the largest investments in a private company in Bay State history."

To read the Journal editorial, this is one of those alternative energy plays which has existed predominantly on government handouts and subsidies.

According to the piece, Evergreen has lost "a cumulative $685 million," presumably to date. Most of this was already lost before the Massachusetts 'investments.'

Blaming Chinese government subsidies to its solar technology firms, Evergreen has closed the Massachusetts plant, with 800 workers, that attracted such attention when the state's governor lauded the firm as a symbol of it's "economic future."

The Journal editorial describes Evergreen as "waiting until it received the $58 million from Massachusetts to announce it would out-source jobs to a plant it continues to operate in China."

Now a fight is looming over whether Evergreen owes more than a mere $4MM to Massachusetts from the $58MM it received prior to exiting the state. And, in a move illustrative of how powerless the state is in the situation, it is allowing Evergreen its "sweetheart $1-a-year lease" because it isn't sure it can secure another tenant.

This is why it's so dangerous to let politicians squander public tax money on private investments. Besides a conflict of interests involving potential competitors within the state, it also requires investing acumen which the state of Massachusetts clearly doesn't possess.

Too bad for its citizens, for whom governor Patrick just blew over $50MM of their hard-earned money.

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