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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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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.

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