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 $300 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.
Fast Pace
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.
EnergyBiz Insider is named a 2012 Finalist for
Original Web Commentary presented by the American
Society of Business Press Editors. The column is
also the Winner of the 2011 Online Column category
awarded by Media Industry News, MIN. Ken Silverstein
has been named one of the Top Economics Journalists
by Wall Street Economists.
Twitter: @Ken_Silverstein
energybizinsider@energycentral.com
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