Solar power gets a sunburn

Suntech

(MoneyWatch) The solar power industry in China took a big hit this week as the main subsidiary of Suntech Power went bankrupt.

One of the largest solar panel companies in the world, Suntech had expanded quickly in recent years on growing demand for solar power and fed by large subsidiaries from the Chinese government. But those subsidies are over. The dynamics of the solar market have turned it into a commercial money pit.

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The use of solar power has emerged around the world, not necessarily as a main source of energy, but as a way to generate supplemental electricity, particularly in locations not easily served by existing power grids. According to trade group Solar Energy Industries Association, installations of photovoltaics -- the technical term for solar cell panels -- grew 76 percent in the U.S. between 2011 and 2012 at an estimated value of $11.5 billion.

But one factor driving that growth has been the artificially low costs in solar. Photovoltaics are a type of semiconductor. And has often happened in the chip industry, demand for a certain product has led to many companies ramping up production, driving down prices with excess capacity. Eventually, the market catches up. Companies either go out of business, or remaining companies shut down plants they don't need.

Chinese solar gear makers, backed by Beijing, have made life difficult for their U.S. and other competitors. Such support was a major reason why one-time industry darling Solyndra went belly up. By supporting companies like Suntech that dumped products internationally at artificially low prices, the Chinese government has helped undermine the market and provide unrealistically priced solar cells.

[acnicolet]

I think the author puts a little too much faith in Suntech and China's ability to direct World PV prices. Its no more than 6 months ago, that the US imposed import tariffs on Chinese panels, so to say that they are dumping cheap under-market value panels in the US is simply untrue.

The solar panel industry is working just fine, and as with any other industry with a trillion dollar potential, competition is picking up. We are going to see both winners and losers.

In the end though, the biggest winner is us. A distributed energy supply brings "power" to the people and moves us away from a technocratic and fossil-fueled past into an era of clean air and water.

[eriksherman]

If you have dumping, then the market isn't "working just fine." You've got temporarily affordable products that will suddenly increase in price when either a country gets tired of subsidizing (like China) or when competitors are driving out and the remaining companies that were able to dump products suddenly increase prices.

And the dumping has been going on for years. That's what really killed Solyndra. Yes, tarriffs were boosted last fall -- and maybe that's what made the Chinese government give up on the scheme.

Plus, there's still the problem of major over supply. That can have bad effects on an industry and on consumers. Just look at the periodic insanity that happens in the semiconductor business.

[stopkillingourwilderness]

The other option the global (we're looking at YOU, USA) economy has, of course, is to increase demand to meet supply by finally implementing policies that will get PV on every sunny rooftop in this nation and pay people fairly for producing that clean, local, high-value power where and when it's needed. We don't have a supply overage - we have a demand underage, and I am sick to death of Big Energy killing off our wilderness areas for profits (yes, that includes useless remote desert solar) while this nation's built environment bakes and sprawls with no panels.

WAKE UP, USA - if you care about the economy, jobs, property values, preventing eminent domain and cyber hacking, open spaces, pollution, climate change or democracy, this is where you need to focus - democratically owned rooftop solar policies that work for real families and businesses!