More here on the failure of European green energy subsidies.
At a speech a while ago, I told this to an investing group a while back: Do the math. You can't build a growth company on public subsidies. It may be possible to grow at first when the subsidized activity (e.g. solar) is a tiny percentage of the market. But once it starts to grow, the projected subsidies are astronomical. The German solar subsidy is something like 50 cents per KwH -- to give one a sense of scale, the typical electricity price from fossil fuels there or here is something like 8-10 cents per KwH. Subsidizing just 20% of US electricity production at this kind of rate would cost $50 billion a year. Subsidizing all production would cost a quarter of a trillion dollars a year.
Take a company dependent on subsidies, figure out what their implied size is in 10 years based on current stock multiples, and then calculate what the public subsidy at current rates would have to be to support that size and a reasonable market share (because competitors are following the same model). Investors who do this will quickly figure out that the subsidies needed to support their favored company are unsustainable. Phoenix-based FirstSolar, a sometimes-darling of Wall Street, has had a rocky year. Its stock price has had several steep falls, each one just after rumors that Germany would cut its solar subsidy rate (actually its feed-in tariff, but the same idea).
My advice to the group was that if you were investing in green energy, either your company had a three year plan to reduce costs to be able to compete profitably in a subsidy-free environment, or else you are investing in pets.com.
Update: If you have Nancy Pelosi's husband on your board, you can probably extend your window to five years.