Solar panel installation companies are laying off workers and NJ residents are waiting years for solar panels to be installed on and around their homes. Why? Because NJ has a rebate program to promote clean energy but they don't have the money to back it up. These installation companies have to wait years to get checks for work that they are doing and they can't afford to install solar panels and not get paid for their work. There are over 700 applications for solar power rebates still backlogged and now NJ is going to have to pull the plug on the program. And it gets even worse... they are funding this failed program with a tax on every one's utility bill! So as the price of oil is going up the NJ government is trying to promote clean energy use by making electricity more expensive? This does not compute!

What is the lesson here? Public subsidies do not work because demand will outstrip supply which will either cause the program to collapse or cause taxes and borrowing by the government to go up. The solution? Reduce property taxes and get rid of utility taxes for everyone so that they have more dispensable income and can afford to purchase solar panels without government rebates.

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Posted originally: 06/25/2008