Solar Panels: Another example of subsidies creating inflation

here:

But governments such as Germany’s, who wanted to give solar and other forms of renewable power an extra boost, began subsidising wind turbines and solar panels in order to speed their adoption. This was supposed to have three benefits: it would reduce emissions of greenhouse gases, spawn a fast-growing and lucrative domestic industry, and help to lower the unit costs of solar panels, thanks to the bigger volumes. Indeed, the three goals are interdependent: solar power will have to be deployed on a massive scale if it is to make much of a dent in emissions, which will only be affordable if it becomes much cheaper.

But Germany’s subsidy, which takes the form of a generous tariff for solar power, has had the opposite effect. So many firms rushed to install solar panels in such profusion that the world ran short of the type of silicon used to make them. The price of silicon—and thus of solar panels—rose. Many firms began to pursue radical new panel designs, simply to reduce their silicon consumption.

Meanwhile, Germany has wound up with more solar panels than any other country in the world—a perverse result for such a cloudy place. It also has fewer wind turbines than it might otherwise—again, an odd outcome for a blustery country. The German government has decided that the subsidy is too expensive, and wants to revise it—just the sort of unpredictable behaviour that tends to alarm rather than entice investors.

O George Stigler, where art thou?