How To Make Money Out Of Sunshine

As you are about to see, my mind is wandering all over the block this evening. It stopped on the question of how Arizona can cash in on the renewable energy tidal wave, particularly how it can charge for sunshine.

A little background. Arizona is on its back. The state is broke and probably needs someone to lend it some short-term money come February as it has some constitutional issues about deficits that are getting uncomfortable. But that’s off the point. The state has one natural resource-sunshine. It has tried to turn that into an industry but the makers of solar power equipment aren’t biting so far. The ultimate snub came when a major manufacturer of the equipment opted for rainy Oregon as a manufacturing site.

Now, realistically there is no good reason to manufacture solar powered equipment in Arizona. Yes, it does have the requisite natural resource-sunshine-in abundance but arguing that you should therefore manufacture the equipment necessary to exploit that resource is like arguing that you should manufacture drilling rigs in Saudi Arabia because they have oil.

You manufacture sophisticated equipment where you have the work force to properly produce it, not necessarily where it might be used. Solar equipment is not terribly expensive to transport but, as I understand it, it does require some semi-skilled labor to manufacture and assemble. Therefore, you go where the work force can do the job. Not necessarily Arizona’s strong suit.

But, Arizona is where the sun does shine so how do they capitalize on it if the manufacturers go elsewhere. Admittedly, they don’t own the sunshine in the same sense that people or governments own the crude that sloshes around under their land. They do, however, own the land that the equipment has to sit on. At least, they own some of it. Unfortunately, the federal government owns a lot of it and could trump Arizona unless they come up with a persuasive argument. So here it is.

The federal government has been trying to bribe the coastal states to allow drilling off their coasts. Now those states don’t own that water, the federal government does. Yet, they are willing to give those states a cut of the royalty pie in order to get them to keep quiet about the environmental impact. So the solution to Arizona’s economic woes and those of its neighboring states is clear.

Just start agitating about the environmental impact of plastering thousands of square miles of worthless desert with mirrors. Of course, for a price, those concerns can be mitigated. It shouldn’t be really too difficult to compute the equivalent amount of energy produced per acre versus an oil well off the coast of California. From there figuring out the relevant royalty that Arizona or any other sunshine producing state ought to receive is pretty simple (any aspiring analysts are invited to submit calculations).

For those of you that are starting to boil at this point, relax. This is a tongue-in-cheek post. But don’t be surprised if it becomes reality.

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