Krugman's Strange Post on Solar Power
By David Henderson
Paul Krugman has a strange post on solar power that contradicts basic microeconomics. He writes:
Like just about everyone who has looked at the numbers on renewable energy, solar power in particular, I was wowed by the progress. Something really good is in reach.
And so, inevitably, the usual suspects are trying to kill it.
How are they trying to kill it? By banning it perhaps. Or maybe by regulating it. Or maybe by taxing it. Those are the three typical ways that opponents of a particular technology usually try to kill that technology.
So which of those methods, or which combination of those methods, do the opponents of solar power advocate? Actually, none.
What’s left? How about deregulating? You read that right. These critics and opponents of solar power, whom Krugman accuses of “tribalism” because of their criticism, oppose solar power so much that they want to stop requiring that it be used and requiring that electric utilities buy it.
Krugman accuses them of wanting “to block solar even if it saves money.” But the way to tell if it saves money is to quit making people use it and quit making people buy it. Then, if it really saves money, people will use it.
Krugman’s piece is priceless: that is, it ignores basic price theory.