China Poised to Corner the Market on Solar Cell Production

So, tell me, how are those “green” jobs going to help our unemployment situation when China, not America,  is the one who will be hiring to build those solar panels?

Obviously, those “green” jobs won’t be here in the United States.

In fact, Australia has already jumped down that rabbit hole and is experiencing buyer’s remorse:

H/T – Gramfan

The sky falls in on solar industry

Dennis Shanahan -  The Australian

JUST before the passage of the Rudd government’s renewable energy target legislation, which was designed to ensure 20 per cent of our electricity came from solar, wind and geothermal sources by 2020 and to foster Australia’s renewable energy industry, Australian Greens leader Bob Brown reassured the public about the viability of the renewable energy industry.

In Canberra on August 19 Brown responded to a statement by the ABC’s Lyndal Curtis that “you can’t export the sun or the wind, you can’t export those renewables” with the confident declaration that indeed you could export renewables.

“Oh yes, you can, and the Germans have made a feast of it and of course they’ve got a multi-billion-dollar export industry in renewable energy with 250,000 jobs created,” Brown said.

Brown, like Climate Change Minister Penny Wong and other government ministers, was reassuring the Australian public that creation of a target for renewable energy made economic sense and would be the source of jobs, jobs, jobs.

[...]

Brown was right, Germany has made a feast of renewable energy. Its largest producer of solar cells, Q-Cells, indeed the world’s largest producer, had been exporting huge amounts of cells, employing thousands and making millions of euros. In the first half of last year Q-Cells made a business operating profit of E119.1 million ($204m).

But, six days before Brown spoke, Q-Cells announced a first-half operating loss of E47.6m, laid off 500 workers, closed a plant, put a further 2000 workers on short shifts and stepped up plans to establish a solar cell plant in Malaysia employing 2000 workers.

Q-Cells production had remained almost constant, according to its business statement.

In Spain, one of the leaders in the installation of solar panels, the industry came to a halt and the main panel maker cut the shifts of 400 workers to a few hours a week. Other manufacturers simply shut down.

[...]

So what happened?

In one word: China.

In its efforts to supplement its energy needs from renewable sources and fulfil its highly ambitious targets to feed in energy to supplement its growing coal-fired and nuclear-powered electricity sources, China has provided lavish subsidies to solar industries. Under these subsidies and ultra-cheap loans from Chinese banks a plethora of Chinese manufacturers has sprung up and flooded the world market with solar cells and panels, which vary remarkably in quality.

[...]

The biggest Chinese company, which is about to become the world’s biggest solar company, Suntech, has cut the price of its panels and cells across the world.

That’s why Q-Cells in Germany has lost so much while maintaining the same production: cut-price Chinese products are driving down returns and making production in Europe unviable without continuing heavy government subsidies.

The price of solar panels in some markets in the US has halved in the past year and in the past six months the cost of some solar panels has dropped by one-third in Australia.

This week Shi Zhengrong, chief executive and founder of Suntech Power Holdings, told The New York Times Suntech was selling solar panels on the US market for less than the cost of materials to build market share.

This sounds suspiciously like dumping into a market, but there is no doubt Californian producers are pointing the finger at Suntech’s prices as a reason for the global collapse in solar cell production.

[...]

The combination of a Chinese-induced price slump in Australia and the Rudd government’s green stimulus, which includes roofing insulation subsidies, is that consumers have rushed to buy solar panels that may be of lesser quality and haphazardly installed because they are effectively free.

But the jobs created are for people bolting on the panels; the longer-term incentive for establishing solar cell production in Australia is diminished. Even some solar panel outlets are struggling because they have been caught with higher-priced European panels.

[...]

You’d think the global financial crisis would teach people a lesson about markets, government subsidies and intervention.

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