The Defense Production Act as a policy tool to boost solar farms


Courtesy of Dominion Energy

by James C. Sherlock

We had several good discussions about the issues surrounding solar farms in Virginia.

Jim Bacon wrote a great column about it in February 2021 titled “The political economy of solar farms.“It was good at the time and prescient from yesterday.

He wrote another two days earlier. From this song:

With the enactment of the Virginia Clean Economy Act (VCEA), Freitas wrote in the press release, Virginia is experiencing extensive land leasing and acquisition by solar developers. More than 180 solar projects representing 140 million solar panels are in various stages of approval or construction. Full implementation of the ACT would consume 490 square miles of Virginia’s forests and farmland, an area twenty times the size of Manhattan.

Thanks to President Biden’s new political-industrial policy, these solar farms have become cheaper. And Chinese solar stocks have become more expensive.

Both of these events happened because the president removed tariffs on Chinese solar panels. Readers can rationally be for or against this action. But the left opted for the Defense Production Act as a favored service animal.

Thus, the President, in addition to removing the tariffs, invoked this act as a national emergency response to the mandate for additional national production of solar panels.

Let’s try to identify the nature of the emergency and the unintended consequences.

Prices. President Trump has implemented additional Chinese tariffs as punishment for hiding the emergence of COVID.

Consultants like KPMG made large sums of money advising foreign companies how to avoid customs duties. Other consultants made their fortunes by pressuring politicians to eliminate them. Virginia’s deep-pocketed Greens, including the new Dominion Energy, lobbied the General Assembly to preserve the VCEA.

President Biden wanted tariffs eliminated. Fair enough. Eliminate them.

National defense emergency? But he said a national defense emergency to activate the Defense Production Act to both accompany and justify the elimination of these tariffs.

Seriously? What could go wrong?

Can the consequences be both predictable and involuntary? They can in BidenWorld. The thought of the presidents: “We can’t deal with it later.”

National industrial policy is difficult. Did anyone tell Mr. Biden that eliminating tariffs on Chinese solar panels would at best disadvantage domestic producers in that market? Did he invoke the Defense Production Act to replace these soon-to-be broken companies?

Or will they be subject to new subsidies? You can never tell in the arena of national industrial policy. Maybe a five-year plan with production quotas will work.

The president did not indicate which US industries are expected to convert their production lines to build solar panels. I guess we’ll find out. It will be very interesting to know what they are ordered to stop produce.

That supply chain thing again.

Or maybe they can hire skilled labor from existing solar producers that are going bankrupt.

No one said national industrial policy was easy. If so, the Soviets could have done it. Oh that’s right.

Network reliability is difficult. Of The Wall Street Journal:

Increasing domestic production of solar panels, heat pumps, building insulation, fuel cells and power transformers can reduce “risks to our power grid,” according to the White House.

The North American Electric Reliability Corporation recently warned that most of the United States could experience power outages this summer. Blame the green energy subsidies that forced the shutdown of fossil fuel and nuclear generators that provide 24/7 baseload electricity. Relying on electric heat pumps and solar panels will make the grid less reliable.

A political emergency demands action. President Biden has not said his green base and his party’s biggest donors to like solar. Including those who have invested heavily in the area of ​​solar farms. As Dominion Energy.

The next stop on the emergency list — wind turbines. Another big investment from Dominion, or should I say Dominion taxpayers.

GE is the largest US producer. Its stock is below its 50- and 200-day moving averages. Danish company Vestas, the world’s largest manufacturer of wind turbines, is losing money. Stock at Siemens, the other major Western producer, is half of what it was in January.

The other four of the world’s seven largest producers of wind turbines are Chinese. Maybe Mr. Biden can lower their rates. That should help. And maybe Ford can convert its production lines to wind turbine production. With licensed Danish engineers and production workers with special visas.

Even the State Department must address a national emergency.

But they broke the champagne at Dominion. Someone else will have to worry about network reliability.

Because the fall elections are a national emergency for the president.

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