Solar Getting Burned Again
It was to be the country’s biggest solar equipment maker. Instead, it will be exhibited by critics of President Obama’s green energy plan. In the spotlight now is General Electric, which has said that it will delay by at least 18 months the construction of a facility to build solar panels.
GE was to make thin-film solar panels that could convert power from the sun to energy used for homes at a 12.5 percent efficiency rate. And while that is 4-7 percent less than those panels produced in China, GE said that its strong point would be cost -- to be so attractive that homeowners could not refuse.
But that notion has been debunked, largely because the Chinese have churned out their conventional solar panels, forcing the price of thin-film panels to fall to such levels that companies here can’t cover their cost of production. GE’s plan is to now improve its technology over the next 18 months so that the efficiency rate of its technology would equal that of its Chinese competitors.
Adding salt to the wound, Abound Solar that acquired a $400 million federal loan guarantee just announced that it would enter into bankruptcy. However, the U.S. Department of Energy is saying that taxpayers will only be responsible for 10-15 percent of the $70 million that Abound had actually drawn down.
“Abound believes that, at scale, its USA-made (thin-film) panel technology has the ability to achieve lower cost per watt than competing (conventional) crystalline silicon technology made in China,” says the company in a statement. “However, aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions.” The solar panel maker declared bankruptcy on June 28.
According to the U.S. Commerce Department, the U.S. solar market has seen the prices for panels drop by more than 50 percent in the past year at a time when the value of imports of Chinese-made solar cells nearly quadrupled from $639 million in 2009 to $3.1 billion in 2011. Abound says that it supports recent initiatives to enforce fair trade with import tariffs, but this action is unfortunately too late for it.
Despite the troubles, solar power here still has huge potential. Altogether, the United States has 5,000 megawatts of solar installed and more is planned. All that is coming from 5,600 solar-related companies. As for GE: It still has more than 27,000 megawatts of wind and solar power installed around the world.
The Solar Energy Industries Association says that falling prices are good for consumers and that within two years, the United States is projected to be a key destination for a lot of new development. Those companies left standing will be providing superior products and services.
“Solar is one of the fastest growing industries in the United States, employing more than 100,000 Americans across all fifty states,” the trade group says. “In fact, a report released just two weeks ago shows the U.S. solar market grew 85 percent in the last year.” Since 2010, it adds that 59 new solar manufacturing facilities have begun operations in the United States.
Critics of the solar power industry don’t object to their fuel source. But they do oppose the swath of state and federal monies used to entice start-ups. Their argument is based on the fact that the United States is running large budget deficits and that solar power only works when the sun shines, which is unlike large base-load plants that run on coal, natural gas or nuclear.
Skeptics are also emphasizing that the cost of green projects relative to the jobs they are creating are soaking up scarce national resources. The money, they add, should either be returned to taxpayers or be used to produce energy forms that operate at greater efficiencies.
Solyndra, of course, will be profiled during the upcoming election season. The company received a $535 million loan guarantee and failed, mainly because it could not compete with the Chinese technology. Then there’s also Evergreen Solar and SpectraWatt, all in addition to Abound. And while GE didn’t go bankrupt, critics will draw the same inferences from its delayed solar deal in Colorado.
“Taking office amidst the worst recession since the Great Depression, President Obama confronted an unemployment crisis by focusing on the promotion of 'green jobs,'”says a House Oversight Committee report on job creation. “Nearly three years and billions of taxpayer dollars later, Americans have received scant return from President Obama's investment.”
The Republicans are saying that the Obama administration’s practice is to pick winners and losers while the White House is arguing that green energy’s potential could be facilitated with a federal boost. GE and Abound have added fuel to the fire, giving the electorate plenty to think about before the November election.
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