Print 16 comment(s) - last by Mint.. on Dec 27 at 6:52 AM

Beijing's solar problems stem from rapid expansion over the past decade and issues with the U.S. and Europe

In response to troubles with its solar panel manufacturing, China is trying to get producers to merge.

Beijing, in particular, is facing problems with its solar panel industry and plans to fix it by reducing government support for the industry, encouraging mergers and blocking local leaders from supporting domestic producers.

Beijing's solar problems stem from rapid expansion over the past decade. It offered grants and low-cost loans, which led to many producers crowding the market. The end result was too many producers that flooded the market with supplies and were forced to lower prices in order to compete. The industry is now about $17.5 billion in debt.

Further complicating Beijing's solar issues is conflict with both the U.S. and Europe. Last month, a U.S. trade panel supported tariffs as high as 250 percent on imports of sola panels from China. This occurred after it was discovered that Beijing was subsidizing imports in an inappropriate way and affecting jobs abroad.

The European Union also started investigating complaints that China was subsidizing solar panel exports improperly and hurting both European producers and jobs.

Of course, China denied doing any of the above.

China has involved itself in many solar projects over the years, such as Beijing's plans to achieve 10 percent of its energy production from renewable resources by 2010, reaching 15 percent by 2020 through the use of wind, hydro, biomass and solar power; China Energy Conservation and Environmental Group's (CECEP) new 6.68 megawatt solar station, and China's solar greenhouses for cheap and efficient growing.

Solar panel companies haven't had an easy time in the U.S., either. Back in September 2011, Silicon Valley-based solar panel company Solyndra filed for bankruptcy after receiving a $535 million government loan in 2009. Reports stated that the White House pushed the loan ahead despite warnings about the viability of Solyndra in order to meet political deadlines.

In October of this year, Satcon Technology, which is a Boston-based company that develops solar inverters, filed for Chapter 11 bankruptcy protection as a result of the poor state of the solar power industry as well as financial earnings.

Source: Phys Org

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Solar Energy
By nihim on 12/24/12, Rating: 0
RE: Solar Energy
By darkhawk1980 on 12/24/2012 2:29:02 PM , Rating: 3
Perhaps because for 50% of the US it isn't economical? Especially here in PA where I live, it isn't worth it. Especially now in the winter time, where we're lucky to get 10 hours of sunlight. Couple that with how cost prohibitive it is to get something that is durable and efficient enough, and you're looking at 10k or more just to enter that market. Guess how long it would take to 'break even' on that investment? It's still 10 years. Given the area I live in, it's easy to see why people don't do it, it just isn't worth the investment. Especially in a depressed economy.

I just don't understand why some people are so short sighted and only see what's in front of them, instead of everything else.

RE: Solar Energy
By Shig on 12/24/2012 5:59:53 PM , Rating: 5
RE: Solar Energy
By Mint on 12/27/2012 6:52:30 AM , Rating: 2
Thanks for the link. Cool info. One thing people should notice is that even though panels can be bought less than $1.50/W, he paid $5.50/W for the complete installation. That's a big problem in the US, where the overhead over 3x as large as in Germany:

Even if solar installations eventually reach grid parity, though, there is cost that's unaccounted for: Every dollar saved is a dollar less going to centralized generators. This would be fine if solar power reduced our need to build other power plants, just like cheap LCDs reduced our need to build CRTs, smartphones reduced our need for MP3/CD/tape players, etc.

Unfortunately, energy is difficult to cheaply store, and solar doesn't generate much on cloudy days or at night. We still need exactly the same fossil fuel capacity no matter how much solar is built. Maybe 5 years from now, home solar power works out to 10c/kWh while grid power costs 13c/kWh, so individually it's smart to choose the former. However, after half the residents of a town switch to solar, grid power has to raise prices to 20c/kWh, and overall the town winds up paying more for energy.

Energy isn't like other goods. It needs centralized planning to be most efficient.

RE: Solar Energy
By Solandri on 12/26/2012 1:40:57 PM , Rating: 2
I'm a big fan of the idea of widely adopted solar energy. I really don't understand why it's struggling as it is. The short-sighted nature of people? I wish it would become standard for new houses to be built incorporating solar panel roofs.

It's struggling because it's still not cost-competitive with other energy sources. The figures I have are a couple years old (before the government subsidies in China dropped panel prices to unsustainably low levels), but overall production costs per kWh were about 5 cents for coal, 6-7 cents for nuclear, 9-15 cents for wind, and 20-40 cents for solar. This excludes externalized costs like air pollution from coal, but still you can see that solar has got a long way to go. Government subsidies may artificially make it look cost-effective to the end buyer, but it doesn't help make it sustainable in the market. Only truly low production costs can do that.

Another mistake people make when comparing cost-effectiveness of solar is just looking at overall lifetime costs as one lump sum. That doesn't properly account for opportunity costs - a dollar spent at the start of a project is more expensive than a dollar spent in the future.* Solar has the highest up-front costs of any power source. This means you don't have that money available for other uses during this time, causing it to have a higher overall cost. $50,000 cost up-front and no maintenance costs for 25 years is more expensive than $25,000 cost up-front and $1000/yr maintenance cost for the next 25 years.

* Another version of this is how if you save $10,000/yr for retirement at 6% interest from ages 20-29 and nothing after ($100k total saved), you end up with more money at retirement than if you save $10,000/yr from ages 30-65 ($350k total saved). $100k in your 20s can be worth more than $350k during your 30s-60s.

RE: Solar Energy
By Shadowmaster625 on 12/26/2012 3:54:02 PM , Rating: 2
It is struggling because it takes more energy to make a solar panel than the panel produces.

makes no sense
By kattanna on 12/24/2012 11:07:35 AM , Rating: 2
plans to fix it by .... blocking local leaders from supporting domestic producers

why would they block buying local and force them to buy foreign?

I think something was lost in the translation somewhere and it should read..blocking buying foreign and mandate buying local.

RE: makes no sense
By heerohawwah on 12/24/12, Rating: 0
RE: makes no sense
By Samus on 12/24/2012 12:32:15 PM , Rating: 2
You obviously don't understand why we have high tariffs on Chinese-imports.

They devalue their currency, they have for decades. Fair trade only works on a level playing field.

RE: makes no sense
By Rasputin814 on 12/24/2012 1:13:48 PM , Rating: 1
every nation manipulates currency. not just China. The us does it as well. It's called quantitative easing. It's another fiscal tool that governments use. The exchange rate of the RMB to the dollar went from 8.5 to 6.5. This has to be a slow process. Raising the exchange rate too fast can cripple an economy. Think it this way. Why would anyone put their savings in bonds, CDs, mutual funds when you can just pour your money into RMB.

RE: makes no sense
By dsx724 on 12/24/2012 1:44:46 PM , Rating: 2
You can't really devalue your currency for a long term. The market catches up within months. You could buy US securities but China's US securities holding is only marginally larger than Japan's US securities holdings. Without China, there would have been double digit inflation in the US for the last decade, making us noncompetitive. Our major trade agreements benefits us way more than it does China.

RE: makes no sense
By Ringold on 12/27/2012 2:56:01 AM , Rating: 2
Two points..
1) There wouldn't of been double-digit inflation, the Fed, and politicians of the era, wouldn't of allowed it. Interest rates would've been higher, and real income levels would've been lower, but double digit inflation we put to bed in the 80s. (I don't think todays Fed or politicians would put up the fight though, high inflation or bankruptcy is the only way the US will "pay" back its bonds and I think more people are realizing this)

2) A country definitely can hold down their currency till hell freezes over.. if they're content to pay the price. Probably why as many developing countries have the inflation they do, they're too busy trying to boost their exporters (and the wealthy probably are allowed to hold their wealth in dollars or euro's, thus screwing only the common man).

RE: makes no sense
By TSS on 12/25/12, Rating: 0
RE: makes no sense
By shadowamazon on 12/24/2012 2:25:26 PM , Rating: 2
Central government which is Beijing, and local leaders are provincial government & smaller regional government. Same as Federal vs. States, cities, counties, and etc.
Local leaders are graded by the GDP growth of the region he oversees. Stellar growth equal to a fast track to the top. They do whatever they can in their power to provide cheap loans, cheap land to encourage growth. This is often done by the means of public debt. Racking up huge debt on public projects and industry support such as the solar panel industry. Now Beijing doesn't want any more money invested into the solar panel industry, the money will be just funneled into other industry. As you can see, this set up allows a few people who has "connections" to get rich quick at the expense of public.(the people at the forefront of the industry that government supports) After all, it is local official who decides where the money gets spent on with little oversight and they have ability to appropriate land use. This is extremely prone to corruption.

Poorly researched
By fesodes on 12/24/2012 1:17:04 PM , Rating: 2
In 2010, China had about only a GW or two of installed solar capacity. Furthermore the 2015 target then was just 5GW. After the Japan nuclear crisis, the 2015 target was raised to 10GW. Then around late 2011 it was further increased to 15GW. In 2012 the target was revised upward 2 more times. First from 15GW to 20GW then from 20GW to 40GW.

Does that sound like discouraging support for domestic manufacturers to you?

US trade restrictions on China
By ScotterQX6700 on 12/26/2012 4:29:54 PM , Rating: 2
Regarding the "problem" with China exporting undercut priced solar panels to US consumers and resellers:

On the surface I see why it is done. Fear that unrealistically low price of solar panels will drive many US manufacturers out of business.

I wonder. Does it ameliorate the issue if we consider all the American consumers getting solar panels for a super cheap price? Is that not a great investment for the consumer? I guess the real question is: Does it balance out the cons of (a) the loss of local manufacturing and (b) increased dependence on Chinese manufacturing?

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