The solar manufacturing industry has been riding a wave of massive expansion due to government subsidies that exist now, but also because the solar manufacturers are betting that the subsidies will either continue and/or be expanded massively in the future to help us attain “energy independence”.
There’s one small problem though. Richard Read, The Oregonian’s two-time Pulitzer Prize winning writer points out that there is an impending bursting bubble in the solar panel manufacturing industry due to a 30% US federal tax credit that expires at the end of this year. Foreign governments also have expiring tax credits that exacerbate the inconvenient truth of solar panel manufactures – that their product cannot compete at all on a level playing field.
Read reports:
Oregon, which weathered the tech boom and bust, may be headed for bubble trouble in solar manufacturing even as the industry takes hold here.
Experts predict a worldwide glut of solar panels and a short-term shakeout of the U.S. sun-power industry that could slow investment in factories of the type state officials are scrambling to attract.
Some solar companies are laying off workers as U.S. and foreign government incentives approach expiration, and as manufacturers in China and elsewhere rush to meet rising demand.
Edwin Koot, a respected solar analyst in the Netherlands, recently issued a report predicting a global surplus of the panels, or modules, that convert sunshine into electricity.
“The industry simply is growing too fast compared to the demand side,” says Koot (pronounced “coat”), founder and chief executive of SolarPlaza, a Rotterdam consultancy. “There are too many companies on the market.”
The Oregonian’s Read notes another problem facing solar energy that may be even more difficult to overcome:
…manufacturers apparently are flocking to the ascendant technology faster than consumers.
According to Read, others are singing the same tune. Solar consultant Glenn Harris, a former president of solar manufacturer PV Powered says:
…the U.S. solar market “will just stop dead” once the federal tax credit expires. Commercial installations will tank, says Harris, chief executive of the SunCentric Inc. consultancy, and some factory investments will be canceled or postponed.
“If it does not get renewed, the U.S. market will shrivel up,” says Christopher Dymond, Oregon Energy Department solar manager.
Read also says that Gregg Patterson, chief executive of solar manufacturer PV Powered “who hosted presidential candidate Barack Obama at PV’s plant last May, expects either a Republican or Democratic administration to renew and enhance solar incentives. But he laments the intervening uncertainty.”
So Patterson expects either future administration to renew and enhance the federal subsidies that prop up an industry that cannot exist without it? Praying for it is more likely.
We keep hearing about solar energy as if it’s a new emerging technology. The truth of the matter is that solar has been around since about the 1970’s (or earlier) and the hardware needed to generate solar-powered electricity still doesn’t pencil out anymore today than it did thirty or more years ago. Here in Oregon, solar panels are still rare, and the folks that do have them mostly use them to warm up their swimming pools in the summertime as they don’t provide enough juice to power the rest of the household.
Gore Lied believes that the governments should stop throwing our money at a non-competitive industry. Let the solar companies sink or swim. You can remove the subsidies, but you cannot remove the profit motive, and that is all the incentive this industry should need to get serious about advancing the technology that will help it compete with fossil fuels, nuclear and hydro-power.
Read the entire Oregonian article here.
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