Spain Levies Consumption Tax on Sunlight

July 26th, 2013

by Mike Shedlock

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Proving that idiocy truly has no bounds, Spain issued a "royal decree" taxing sunlight gatherers. The state threatens fines as much as 30 million euros for those who illegally gather sunlight without paying a tax.

The tax is just enough to make sure that homeowners cannot gather and store solar energy cheaper than state-sponsored providers.

Via Mish-modified Google Translate from Energias Renovables, please consider Photovoltaic Sector, Stunned

The Secretary of State for Energy, Alberto Nadal, signed a draft royal decree in which consumption taxes are levied on those who want to start solar power systems on their rooftops. The tax, labeled a "backup toll" is high enough to ensure that it will be cheaper to keep buying energy from current providers.

Spain Privatizes the Sun

Via Google translate from El Pais, please consider Spain Privatizes The Sun

If you get caught collecting photons of sunlight for your own use, you can be fined as much as 30 million euros.

If you were thinking the best energy option was to buy some solar panels that were down 80% in price, you can forget about it.

"Of all the possible scenarios, this is the worst," said José Donoso, president of the Spanish Photovoltaic Union (UNEF), which represents 85% of the sector’s activity.

Before the decree it took 12 years to recover the investment in a residential installation of 2.4 kilowatts of power. Following the decree, it will take an additional 23 years according to estimates by UNEF.

Petition of the Candle Makers Revisited

And so the " Petition of the Candle Makers " comes to pass.

I have written about the " petition " on many occasions, but here is the latest reference: Extremely Difficult to Keep Up With Economic Stupidity

Reflections on "Unfair Competition"

Corporations always consider it " unfair " when any other company can do things faster, smarter, or cheaper than they can. The buggy whip industry once protested cars.

Today, land-line telecom companies have to compete with wireless and they don't like it. Now, we see protests about VOIP (voice over internet protocol).

Technology marches on. But France does not like it. The French solution is to tax Skype because it has an " unfair advantage".

This is an age-old unwinnable argument.

Petition of the Candle Makers

The ultimate irony is France's preposterous " unfair advantage " argument was lampooned by French economist Frederic Bastiat back in 1845 when he penned 'Petition of the Candle Makers'.

In his article, candle makers were incensed that the light of the sun could be had for free. The sun's unfair trade advantage was to the "detriment of fair industries" who could not compete against the sun's price.

Something had to be done to "shut off as much as possible, all access to natural light, and thereby create a need for artificial light" so that "industry in France will encouraged".

The moral to this story is "Don't propose something purposefully stupid hoping to make a point. Some idiot might actually think it's a good idea and do it".



Originally posted at Mish's Global Economic Trend Analysis

© Mike "Mish" Shedlock

Investment Advisor Representative
www.sitkapacific.com

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