“WIN, WIN, WIN, WIN” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 158

In early 2010, MiaSolé received provisional support from the U.S.
government to build out its manufacturing facility. h e details were dif-
ferent from the Solyndra case—among other things, MiaSolé received
the option to draw on a pair of Advanced Energy Manufacturing Tax
Credits worth $101.8 million rather than a loan guarantee—but the
basic theory behind the subsidy was similar. 46
h ere was, in principle, a case to be made for such intervention.
Most economists agree that the free market alone does a weak job of
promoting as much radical innovation as society could use. Because
individual i rms and inventors don't capture the full economic benei ts
of their innovations, they're likely to underinvest in them. Imagine, for
example, that at er spending years of your life and millions of dollars
of i nanciers' money, you discover a new physical principle that can be
used to massively boost the performance of solar panels. h e innovation
is too fundamental to be eligible for a patent; as a consequence, all of
your competitors can use it to beat you at your own game. Looking for-
ward to that possibility, will you invest in the research ef ort in the i rst
place? Will your bankers put up the money you need to succeed?
Or suppose that your company is deciding whether to build a i rst-
of-a-kind coal plant that captures and buries all of its carbon dioxide
emissions. Scientists and engineers have explained for years that such
plants are possible, but to date none are in operation. As a result, com-
panies can't fully judge the costs and risks of building such facilities
themselves. If you build a new plant, everyone—including your com-
petitors—will learn a lot about what it takes to succeed in the busi-
ness. Having proven the viability of such an advanced facility, you may
actually i nd the information you generate being used to push your
company aside. At a minimum, this will make you think twice about
risking the billions of dollars that such a project requires.
Lots of innovation, of course, still happens without government sup-
port. Venture capitalists regularly put up money against small odds of
a major success. But as those high-risk investors have gradually moved
from areas such as information technology and biological sciences to
clean energy and related i elds, they have discovered that existing mod-
els for i nancing big advances don't always work quite as well. Energy
technologies can take decades to mature, but few investors have more