Eight Global Trends to Watch that Will Impact the Land Market – Week 4

Solar:

Several years ago a city in Texas with 70,000 residents gained notoriety as being the first city in the United States to vote to go totally to renewable electricity. After visits to the Obama White House and media stories hailing the wisdom of this leadership, the price for fame has now come due.

At their August meeting the Council of that Texas city acknowledged that their deficit for 2020 would be in excess of $5M, swamping their budget. They are now frantically attempting to get out of their commitments for renewable energy so that they can get control of their budget.

This experience is consistent with countries such as Germany that have made the biggest push towards renewable energy. As a result, Germany has the most expensive electricity in the world. That is not a competitive position long-term.

While desirable, intermittent and extremely costly solar and wind generated electricity is expanding only because of government rebates and taxpayer subsidies. This mis-allocation of resources will end badly. Anything the government touches gets corrupted.

But resource allocation in turn distorts land values. We have seen some of that in Virginia already.