Some people are more observant than others. Some are more capable of thinking outside the box than others. Whether this is by nature or nurture is a moot point.
When we are children, we tend to look upon the world in all its wonder. We are amazed at what exists and we absorb it like a sponge. Then, when we are in our teens, we begin our second wave of discovery. We begin to pay more attention to the things that we find confusing; we become absorbed in issues like world hunger, warfare and political strife. These situations seem senseless and we repeatedly ask, “Why should these things be?”
Typically, in our twenties, we have not yet found any solid answers and our mood turns from interest to anger. We tend to gravitate toward liberal philosophy, as liberal philosophy tells us what we would most like to hear; that these terrible things should not exist and that we should take every step available to us to end the injustices of the world – at whatever cost to ourselves and others.
Most of us continue in this approach for several years, but in our thirties we begin to recognize that, no matter how many steps are taken in this effort, the problems seem to be self-renewing and, at that point, a split occurs in philosophical outlook. Many people cease to grow at this point, as they do not want to live in a world where it is necessary to accept that suffering of one type or another is perennial. They may become increasingly stubborn in this view and, from this point on in life, tend to dig in their heels increasingly and fail to continue to grow in their understanding of the world.
…click on the above link to read the rest of the article…
The IMF said the the quiet part out loud today (admittedly wrapped in 100s of pages of PhD-ese) in their benchmark Fiscal Monitor this morning: pointing out that America’s recent economic performance is partially the result of the country’s unsustainable borrowing, and that the US’ massive fiscal deficits have stoked inflation and pose “significant risks” for the global economy.
“The exceptional recent performance of the United States is certainly impressive and a major driver of global growth, but it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability,” the IMF wrote in its latest World Economic Outlook. They added that: “Fiscal policy developments in major economies, notably in the United States, have implications for global financing conditions.”
The IMF said the US had exhibited “remarkably large fiscal slippages”, with the fiscal deficit hitting 8.8 per cent of GDP last year – more than double the 4.1 per cent deficit figure recorded for 2022, calculating that ‘Bidenomics’ (and its Inflation Reduction Act) had contributed 0.5 percentage points to core inflation (due to its fiscal profligacy).
The fund further said in its Fiscal Monitor report that it expected the US to record a deficit of 7.1 per cent next year – more than three times the average for other advanced economies. It also raised concerns over Chinese government debt as Beijing copes with weak demand and a housing crisis.
The US and China were among four countries the fund named that “critically need to take policy action to address fundamental imbalances between spending and revenues.”
The others were the UK and Italy.
…click on the above link to read the rest of the article…
The federal debt has been recently increasing by $1 trillion every 100 days. That’s $10 billion per day, $416 million per hour.
In fact, Uncle Sam’s debt has risen by $470 billion in the first two months of this year to $34.5 trillion and is on pace to surpass $35 trillion in a little over a month, $37 trillion well before year’s end, and $40 trillion some time in 2025. That’s about two years ahead of the current CBO (Congressional Budget Office) forecast.
On the current path, moreover, the public debt will reach $60 trillion by the end of the 10-year budget window. But even that depends upon the CBO’s latest iteration of Rosy Scenario, which envisions no recession ever again, just 2% inflation as far as the eye can see and real interest rates of barely 1%. And that’s to say nothing of the trillions in phony spending cuts and out-year tax increases that are built into the CBO baseline but which Congress will never actually allow to materialize.
So when it comes to the projection that the 2034 debt will come in at just $60 trillion, we’ll take the wonders any day of the week. The fact that it will likely be much higher also means that the Washington UniParty’s prevailing fiscal policy path will lead to $100 trillion of public debt sometime in the early 2040s. And that means, in turn, that annual interest expense will then be greater than the entire federal budget during 2019.
Needless to say, neither Trump nor Biden has said, “Boo,” about this looming calamity. Sleepy Joe has even had the audacity to brag that he has reduced the federal deficit by more than half.
…click on the above link to read the rest of the article…
Bloomberg Economics ran a million forecast simulations on the US debt outlook. 88% of them show borrowing on an unsustainable path.
The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97% of GDP last year to 116% by 2034 — higher even than in World War II. The actual outlook is likely worse.
From tax revenue to defense spending and interest rates, the CBO forecasts released earlier this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume — as most in Washington do — that ex-President Donald Trump’s tax cuts mainly stay in place, and the burden gets even higher.
Simulations Show Range of Uncertainty Around CBO’s Forecasts
10th and 90th percentile results of a million scenarios
With uncertainty about so many of the variables, Bloomberg Economics has run a million simulations to assess the fragility of the debt outlook. In 88% of the simulations, the results show the debt-to-GDP ratio is on an unsustainable path — defined as an increase over the next decade.
The Biden administration says its budget, featuring a slew of tax hikes on corporations and wealthy Americans, will ensure fiscal sustainability and manageable debt-servicing costs.
“I do believe we need to reduce deficits and to stay on a fiscally sustainable path,” Treasury Secretary Janet Yellen told lawmakers in February. Biden administration proposals offer “substantial deficit reduction that would continue to hold the level of interest expense at comfortable levels. But we would need to work together to try to achieve those savings,” she said.
Trouble is, delivering on such a plan will require action from a Congress that’s bitterly divided on partisan lines.
…click on the above link to read the rest of the article…
Named after American economist Hyman Minsky, the idea behind a Minsky moment is that a financial markets crisis (especially in credit markets) is caused by a sudden and systemic collapse in asset prices, usually after a sustained period of speculative investment, excessive borrowing, and widespread financial risk taking. In other words, it’s the moment when the music stops playing, investors stop buying, and the Ponzi game ends abruptly. It’s a hard crash.
America may be on the brink of its Minsky moment.
This process, which moves from slowly, slowly, to suddenly and now, goes back decades.
The confrontation with reality that was required to put America’s economic house back in order after the global financial crisis of 2008–09 was deferred to a later date by politicians, central bankers, and government officials alike, presumably when they would no longer be around.
Instead of taking the painful but necessary steps of liquidation—i.e., allowing more over-levered and risk-heavy banks and financial firms to fail, and for the economy to take the short-term pain, then move on—the U.S. government and the Federal Reserve kicked the can down the road by massive money-supply expansion and unproductive government spending.
The same playbook from the financial crisis (i.e., money printing and fiscal excess) was used again in 2020 in response to the pandemic. As the monetary authorities had but one instrument in their toolbox—the blunt-force cudgel of money-supply growth—it was the go-to solution.
As the saying goes, when the only tool available is a hammer, every problem looks like a nail. In both instances—the financial crisis and COVID periods), the U.S. Congress went on a massive spending spree, not realizing (or, as political animals with short time horizons, not caring) that excess and repeated deficit spending, and the debt creation needed to fund it, would eventually spiral out of control and doom future generations.
The federal debt has been recently increasing by $1 trillion every 100 days. That’s $10 billion per day, $416 million per hour.
In fact, Uncle Sam’s debt has risen by $470 billion in the first two months of this year to $34.5 trillion and is on pace to surpass $35 trillion in a little over a month, $37 trillion well before year’s end, and $40 trillion some time in 2025. That’s about two years ahead of the current CBO (Congressional Budget Office) forecast.
On the current path, moreover, the public debt will reach $60 trillion by the end of the 10-year budget window. But even that depends upon the CBO’s latest iteration of Rosy Scenario, which envisions no recession ever again, just 2% inflation as far as the eye can see and real interest rates of barely 1%. And that’s to say nothing of the trillions in phony spending cuts and out-year tax increases that are built into the CBO baseline but which Congress will never actually allow to materialize.
So when it comes to the projection that the 2034 debt will come in at just $60 trillion, we’ll take the wonders any day of the week. The fact that it will likely be much higher also means that the Washington UniParty’s prevailing fiscal policy path will lead to $100 trillion of public debt sometime in the early 2040s. And that means, in turn, that annual interest expense will then be greater than the entire federal budget during 2019.
Needless to say, neither Trump nor Biden has said, “Boo,” about this looming calamity. Sleepy Joe has even had the audacity to brag that he has reduced the federal deficit by more than half.
…click on the above link to read the rest of the article…
The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. The crisis is coming to a head with France and Italy in the spotlight. The first casualty will be Green policy.
Deficit rule: a country is compliant if (i) the budget balance of general government is equal or larger than -3% of GDP or, (ii) in case the -3% of GDP threshold is breached, the deviation remains small (max 0.5% of GDP) and limited to one year.
Debt rule: a country is compliant if the general government debt-to-GDP ratio is below 60% of GDP or if the excess above 60% of GDP has been declining by 1/20 on average over the past three years.
Structural balance rule: a country is compliant if (i) the structural budget balance of general government is at or above the medium-term objective (MTO) or, (ii) in case the MTO has not been reached yet, the annual improvement of the structural balance is equal or higher than 0.5% of GDP, or the remaining distance to the MTO is smaller than 0.5% of GDP.
Expenditure rule: a country is complaint if the annual rate of growth of primary government expenditure, net of discretionary revenue measures and one-offs, is at or below the 10-year average of the nominal rate of potential output growth minus the convergence margin necessary to ensure an adjustment of the structural budget deficit in line with the structural balance rule.
Deficit Disaster Zones
France and Italy are major disasters right now on the budget deficit rule. France has a budget deficit of 7 percent and Italy 5 percent.
France needs to reduce its deficit by a whopping 4 percent of GDP!
Neither Italy nor Greece should have been allowed in the EMU (European Monetary Union – Eurozone) in the first place.
…click on the above link to read the rest of the article…
Well, everyone wanted to do what they wanted to do instead of what they needed to do, and this is the end result. It was inevitable. Neglecting our responsibilities on this earth only had one outcome, and it’s a living nightmare. I think it’s time we talked about the time we all F-’d around, and ended up in Find Out-ville.
MOTHER NATURE IS PISSED
Look, we are definitely not on a winning streak right now. Mother Nature is pissed off, the weather and climate is all over the place, our food supplies are being disrupted in every way imaginable, and natural disasters are occurring left and right with no end in sight. And to top it off, people are struggling economically, emotionally, and psychologically. Don’t get me started on politicians, business leaders, and the 1%. Oh did I mention that everyone I know is in debt? But the reality is, I think we only have one to blame for our situation, ourselves. After all, we allowed it to happen, stood by and watched and went right along with it.
WE WERE WRONG
Personally, I think it all started with money and the inevitable greed that it brings to literally every society that has ever used it, but that’s another story. If you’re in the Daniel Quinn camp, it all started with the agricultural revolution 10,000 years ago when we transitioned from nomadic to sedentary and started taking more than we need (Ishmael had some good points on this). What ever the start, we are most definitely racing towards the finish like a fireball on cocaine. How the hell did we end up here? Well that is simple.
Roadblocks To Our ‘Renewable’ Energy Transition: Debt, Resource Constraints, and Diminishing Returns
Today’s contemplation is a quick rundown of three of the roadblocks I see preventing us from achieving the utopian dream of a seamless ‘clean’ energy transition from dirty fossil fuels, or at least one as marketed by the ruling caste and leveraged by many (most?) businesses to sell their products/services (and virtue-signal their ‘progressive’ nature).
These few items have been percolating in my mind this past week or so with a number of articles I’ve perused during my morning coffee. If readers can add to these in the comments (with appropriate supportive links), I will begin to create a more comprehensive list to share periodically down the road…
Here, in no particular order, are three of the issues I’ve been pondering:
For all intents and purposes, and by most observable accounts, our financial/monetary/economic systems are Ponzi-type systems requiring constant expansion/growth to keep from collapsing[2]. Many lay the beginnings of this treacherous trend upon Richard Nixon’s abrogation of the Bretton Woods Agreement that hammered the final nail in the coffin of a precious metals-based monetary system[3]. Others point to the introduction of fiat money/currencies as the initiation point, when the ‘constraint’ of physical commodities was removed from money and government/ruling elite solidified their monopoly of its creation/distribution. If one looks back even before modern fiat currencies, however, there is much written about how the Roman ruling elite were engaged in such manipulation of their money[4].
The Ponzi nature of these systems requires that perpetual growth be pursued. That such a pursuit is impossible on a finite planet should be self-evident but as I have highlighted previously we walking, talking apes are story tellers whose imaginations are creative at weaving tales to reduce anxiety-provoking thoughts — such as our ingenuity and technological prowess allows us to ignore/deny/rationalise away physical laws and biological principles and pursue infinite growth despite any bio- and geo-physical limitations.
That we have created and depend significantly upon such increasingly complex and fragile systems should give us pause, but this is rare and typically frowned upon. There seems only three basic means of dealing with such a situation: 1) inflate away the problem[5]; 2) debt jubilees[6]; 3) growth[7]. All of these approaches seem to have been used individually or in combination in history, and yet the endgame tends to be the same every time certain tipping points are reached: rejection of the monetary system of the time.
There’s been a boatload of analyses on what such a repudiation of a society’s currency system means to a people and their society[8]. While a currency ‘collapse’ does not necessarily lead to societal ‘collapse’, it does appear to throw economic systems into chaos for some time and destroy much in the way of societal ‘wealth’ and thus investment capital; and contributes to the eventual fall of a society — especially if there’s no lender-of-last-resort to ride to the rescue.
Such a situation would seem to negate the possibility of achieving the dream of transitioning to some ‘clean/green’ energy-based society given the magnitude of the debt that is currently present, the ‘wealth’ this represents, and the huge investments that would be necessary for a shift from our primary source of energy (fossil fuels).
Perhaps the most significant impediment going forward from a currency collapse would be the general lack of trust in government and financial institutions. And it is ‘trust/confidence’ that keeps these fragile systems from being totally abandoned; when it is lost, there’s no telling how quickly more widespread ‘collapse’ may occur. As archaeologist Joseph Tainter argues, it is when the economic benefits of participating in a complex society fall below the costs incurred that a populace begins to abandon its support of the various systems and ‘collapse’ can soon follow[9].
Mineral/resource constraints
That we exist upon a finite planet should also give pause to those cheerleading a ‘renewable’ energy transition in that geophysical realities limit what we can physically accomplish in terms of resource extraction and use.
Simon Michaux, Associate Professor Mineral Processing and Geometallurgy at the Geological Survey of Finland, has for some time been highlighting the impossibility of replacing our fossil fuel-based systems with non-renewable, renewable energy-harvesting technologies (NRREHT)[10].
The main hyped-up narrative surrounding the utopian future we are constantly promised by our societal leadership (both political and corporate) is that of a clean-energy future that not only sustains our present-day energetic conveniences, but allows continual expansion, technological progress, and prosperity. Dr. Michaux asserts that this is a pipe-dream because there do not exist the needed minerals to carry out such a transition from fossil fuels. Not even enough to replace and thus sustain the current level of energetic needs, let alone continuing to pursue growth.
Advocates dismiss this inconvenient reality — to say little about the environmental/ecological system damage that would result from the mining and processing of all the minerals and products required — by suggesting this can be overcome by reducing our energetic consumption/needs to a far lower level such that the finite materials can meet our needs, or developing many as-yet-to-be-hatched energy-production chickens. They also raise the arguments that recycling will guarantee perpetual resource requirements failing to understand that this is a very energy-intensive process and not as effective in reducing energy-use and pollutants as marketed[11] and are even being abandoned in many regions due to increasing costs[12].
Diminishing Returns
The human tendency in addressing resource requirements (in fact, to solve most problems) is to utilise the easiest-to-access and cheapest-to-extract ones first, leaving the more expensive and difficult ones to a later time. This, of course, means we must invest greater and greater amounts of labour/energy into extraction and processing as time passes, even to simply maintain current levels. In economic parlance, this reality has become referred to as the law of diminishing returns/productivity.
In energy circles, this tendency has been used to develop the concept of energy-return-on-energy-invested (EROEI)[13]. Basically, this is the ‘net’ energy that one derives from energy production. The greater the EROEI, the greater the amount of energy that can be used for purposes other than accessing/extracting/producing the energy in the first place. But as EROEI falls, there is less and less energy available for non-energy extraction/production systems.
We have witnessed a significant and precipitous drop in EROEI for fossil fuels[14], and the EROEI for NRREHTs is quite a bit lower than the legacy oil/gas fields that our globalised industrial world has used to grow to its present complexity; in fact, some argue that the EROEI of NRREHT is so low as to be incapable of supporting today’s globalised civilisation at anywhere near the current level of complexities[15].
A Few Other Hurdles to Our ‘Renewable-Energy’ Utopia
Here are a few additional issues that would seem to make the dream of a ‘clean’ energy future anything but doable, especially to the degree some (many? most?) imagine.
1. Current advanced-economy lifestyles require more energy than can be provided by ‘renewables’[16].
2. ‘Renewables’ require significant fossil fuel inputs[17].
3. Significant industrial processes cannot be carried out via ‘renewable’ energies[18].
4. And, perhaps most importantly, both the upstream and downstream industrial processes necessary to create, maintain, and reclaim/dispose of ‘renewables’ wreak havoc on our environment and ecological systems[19].
I could write much more on each of these roadblocks to the idea of our complex global society transitioning to NNREHT. Whether one accepts these as insurmountable or not depends very much on one’s interpretation of the data/evidence — and probably to a greater extent on one’s hopes/wishes (i.e., personal biases).
Keeping at the forefront of one’s thinking the fact that the future is unknowable, unpredictable, and full of unknown unknowns, anything is possible. But I would argue we do ourselves no favours in participating in and believing without full skepticism our various narratives about endless growth and technological ingenuity as the saviours that will make our utopian dreams/wishes of a ‘clean/green’ future come true.
Such magical thinking keeps us on a trajectory that increasingly is looking to be suicidal in nature, or, at the most promising, deeply ‘disappointing’ and broadly chaotic/catastrophic.
Time, of course, will tell…
And please note, as I have had to emphasise with others whom I’ve disagreed with regarding this ‘clean’ energy transition and NRREHTs: “… it is not that I ‘hate’ renewables or am a shill for the fossil fuel industry (the two typical accusations lobbed at me); I simply recognise their limitations, negative impacts, and that they are no panacea.”
[18] See this. It’s imperative to note here that all rationalisations of ‘clean’ industrial processes rely upon as-yet-to-be-hatched chickens such as Carbon Capture and Storage or untenable energy production such as that based upon the use of hydrogen.
Analyst and financial writer John Rubino warned nearly four months ago of a “U.S. Financial Death Spiral.” This past week, Bank of America caught up to Rubino and issued a warning about a “US dollar death spiral” because the federal government was going deeper in the red by creating “$1 trillion in new debt every 100 days.” Maybe this is why gold and Bitcoin have been hitting new all-time highs day after day. Rubino says, “When a building was worth $200 million and someone sells it for $48 million, that means there is a loss that someone has to take. Those losses are mostly on the books of regional and local banks. So, they are in big trouble financially. . . . You will get these massive bank runs that the government will have to step in and bail out. This is one of many things that will happen in the not-so-distant future. This will impact government finances in a scary way that will send people’s attention to the currency. In other words, if we have another $3 trillion bailout on top of everything else that’s going on . . .what is that going to do to the dollar? . . . . Currencies are being inflated away with all these bailouts, deficits, wars and all these things that are going on that are bad for the currency. So, people start selling government bonds, which push up interest rates and blows up even more bad real estate and paper . . . until you get a debt spiral, a real live financial death spiral than cannot be fixed. . . . I was talking to a real estate guy the other day, and he said this is not just inevitable, it is imminent. It is happening now. It is happening quickly, and it is going to hit the headlines. . . . In this case, what is inevitable in commercial real estate is also looking imminent.”
The relentless increase in global debt is an enormous problem for the economy. Public deficits are neither reserves for the private sector nor a tool for growth. Bloated public debt is a burden on the economy, making productivity stall, raising taxes, and crowding out financing for the private sector. With each passing year, the global debt figure climbs higher, the burdens grow heavier, and the risks loom larger. The world’s financial markets ignored the record-breaking increase in global debt levels to a staggering $313 trillion in 2023, which marked yet another worrying milestone.
In the Congressional Budget Office (CBO) projections, the United States deficit will fluctuate over the next four years, averaging an insane 5.8 percent of GDP without even considering a recession. By 2033, they still expect a 6.9 percent GDP budget hole. Unsurprisingly, the economy, even using optimistic scenarios, stalls and will show a level of real GDP growth of 1.8% between 2028 and 2033, 33% less than the 2026–2027 period, which is already 25% lower than the historical average.
Some analysts say that this whole mess can be solved by raising taxes, but reality shows that there is no revenue measure that will fill an annual financial hole of $2 trillion with additional yearly receipts. This, of course, comes with an optimistic scenario of no recession or economic impact from a higher tax burden. Deficits are always a spending problem.
Citizens are led to believe that lower growth, declining real wages, and persistent inflation are external factors that have nothing to do with governments, but this is incorrect. Deficit spending is printing money, and it erodes the purchasing power of the currency while destroying the opportunities for the private sector to invest. The entire burden of higher taxes and inflation falls on the middle class and small businesses.
The rot caused by easy money will only become fully visible when the hollowed out institutions start collapsing under the weight of incompetence, debt and hubris.
We have yet to reach a full reckoning of the consequences of the era of easy money, but it’s abundantly clear that it ruined us. The damage was incremental at first, but the perverse incentives and distortions of easy money–zero-interest rate policy (ZIRP), credit available without limits to those who are more equal than others–accelerated the institutionalization of these toxic dynamics throughout the economy and society.
Fifteen long years later, the damage cannot be undone because the entire status quo is now dependent on the easy-money bubble for its survival. Should the bubbles inflated by easy money pop, the financial system and the economy will collapse into a putrid heap, undone by the perversions and distortions of endless easy money.
Easy money created destructive, mutually reinforcing distortions on multiple fronts. Let’s examine the primary ways easy money led to ruin.
1. The near-zero rate credit was distributed asymmetrically; only the wealthiest few had access to the open spigot of “free money.” The rest of us saw mortgage rates decline, but we were still paying much higher rates of interest than corporations, banks and financiers.
If we’d all been given the opportunity to borrow a couple million dollars at 1% and put the easy money into bonds yielding 2.5%, skimming a low-risk 1.5% for producing nothing, we’d have jumped on it. But that opportunity was only available to banks, the super-wealthy, corporations and financiers.
The charts below show the perverse consequences of offering the wealthiest few limitless money at near-zero rates while the rest of us paid much higher interest. The wealthiest few could buy income-producing assets on the cheap at carrying costs no ordinary investor could match…
In late December, I published a final report on the themes of 2023 while looking ahead at their implications for the year to come.
I repeated my claim that debt markets and debt levels made the future of Fed policies, currency moves, rate markets and gold’s endgame fairly clear to see.
Of course, as facts change, opinions change as well.
But the facts are only worsening, which means my opinions in late 2023 are only growing stronger as we conclude the first month of 2024.
Then as now, the debt-soaked US is tilting ever more toward policies which will weaken its currency, wound its middleclass and reward its false idols (and false markets) with even greater desperation.
In particular, some recent facts below are emerging which further support my otherwise sad conviction that the American economy (not to be confused with its Fed-supported stock exchanges) is literally living on borrowed time.
The Latest Bits of Crazy from the CBO
Almost a year ago to date, I was shaking my head and rubbing my eyes as the Congressional Budget Office (CBO) announced a staggering $422B Federal budget deficit for Q1 2023.
Now that’s a lot of borrowing in a short amount of time…
For some strange reason, this bothered me in early 2023, as I was still under this odd impression that debt, and hence deficits, actually mattered.
Fast forward to January 2024, and that same CBO has just announced a $509B Federal budget deficit for Q1 2024.
Folks, that adds up to annual deficit run rate of $2.2T.
In other words, money has no inherent value. Economists often attempt to change the subject by pointing out that money is at least a medium of exchange, a store of value or a unit of account. The same, however, could be said for cigarettes that were used as money in Communist Romania in the 1980s.
“Society runs on energy and materials, but most people think it runs on money…[Money] is created as debt subject to mathematical laws of compound interest…Money eventually gets spent on a good or service which will contain embodied energy. Money is a claim on energy yet its creation is not tethered to energy availability or cost.”
In the end, money–as paper, coins, gold or cigarettes–is just a financialclaim on energy, a marker, a unit of account. For example, I may contract someone to do work for me—to build a fence or to move some heavy equipment—and we agree on a payment amount. I pay him dollars for his physical work (joules). He may then use those dollars to buy food (joules), gasoline for his car (joules) or contract someone else’s labor to do some work for him (joules). Money is the medium of exchange but the value exchanged is energy.
The solar industry in California is facing significant headwinds following the implementation of a new policy in April, which reduced incentives that had encouraged homeowners to install solar systems.
Bloomberg reports the California Solar & Storage Association has found about 63% of its 400 solar installer members have reported cash flow issues because the new policy crushed consumer demand.
Since last April, sales of rooftop solar systems across the state have crashed 85% in the most recent months of 2023 compared to similar periods one year before, according to solar firm Ohm Analytics.
On Wednesday, California Solar and Storage Association Executive Director Bernadette Del Chiaro told an audience at the Intersolar North America conference in San Diego that 25 to 30 solar companies have already closed shop or abandoned the state.
“We are worried about the next two months,” she said. “We think a lot more fallout may be coming.”
Besides a reduction in incentives, higher interest rates and expensive panels have also curbed demand. This means that solar installers have a dismal pipeline of work through the year’s first half.
Meanwhile, a Bloomberg MLIV Pulse survey of professional and retail investors from late last year found the green energy downturn will last well into 2024.
iShares Global Clean Energy ETF has nearly roundtriped Covid lows.
The ownership portfolio of the iShares Global Clean Energy ETF shows solar, wind, and hydrogen stocks have been clubbed like a baby seal over the past year.
