What’s more beneficial to our country and environment — a rapid deployment of renewable technologies through specially crafted policies and incentives, or letting markets determine which technologies win?
See the German solar miracle, which has made the cloudy country the largest solar consumer in the world and a major manufacturer of panels. California has become a hotbed of solar activity because of federal and state tax credits that cover more than 30 percent of the costs of the equipment. Ideally, the incentives and supportive policies can be phased out over time.
Free market advocates argue that incentives distort the market. See the Spanish solar debacle, where fluctuating incentives lead to economic chaos for solar companies that rushed to Spain. In Texas, some wind farm owners actually pay customers to take electricity because of a wrinkle in the incentive program.
Historical examples support both sides. Railroads crisscrossed the country in the nineteenth century in part because of sweetheart land grants from states and the federal government. The U.S. freeway system, created to enhance national security, lead to a population boom and new cities in the Southwest. The internet? It grew out of a military research program.
But how about those inefficient national airlines? Or hydrogen cars? Government is often not good at picking winners, say critics.
What do you think we should do?
Read more on this topic in a joint effort by General Electric Ecomagination and Greentech Media, and join the conversation here.