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Solar Industry “Darwinism” Weeding Out Weaker Companies

Solar panel manufacturer Solyndra, which recently filed for bankruptcy, got special treatment from the Obama administration, some have alleged, since the company’s $535 million in federally guaranteed loans had much lower interest rates than those of other green energy companies, according to an investigative report.

The FBI raided Solyndra’s office, although it would not comment on the reason. The company shut without giving notice to its employees and contractors, which many large companies are legally required to do.

However, Lewis Milford of the Clean Energy Group argued critics are inconsistent in highlighting Solyndra’s failure, since there are many examples of failure in government projects—and that a high rate of failure is inevitable in innovative fields. Overall, the Loan Guarantee Program has performed well, and Solyndra’s failure is not a reason to abandon it, Forbes argued.

Solyndra is only one of many solar energy companies around the world struggling recently, due in large part to rising costs of materials and weaker-than-expected demand for panels, which have led to a sharp rise in mergers and acquisitions compared with last year.

Germany has long been a solar powerhouse, but one of its companies—SolarWorld—is also having trouble, and is shutting down factories in Germany and the U.S. and consolidating manufacturing. Another German solar company, Solon, is shutting an Arizona plant and laying off workers.

All this activity “is Darwinism at work in business,” said an executive of manufacturer Abound Solar.

Solar at Scale

Nonetheless, large solar projects are moving ahead. The U.S. has offered a loan guarantee for putting solar panels on military housing, which could double the number of residential rooftop arrays in the country.

With solar panel costs falling, the European Photovoltaic Industry Association said, solar could be competitive with conventional energy within a couple of years in some markets, and across Europe by 2020.

Also, a new projection from the International Energy Agency said in 50 years’ time, solar energy could provide more than half the world’s power.

Spinning up Fresh Debate

Iran joined the list of nuclear countries by connecting its first nuclear power plant to the grid last week, according to the country’s official media.

Also, the International Atomic Energy Agency reported Iran began running upgraded centrifuges. Iran also offered to allow inspectors “full supervision” of its nuclear activities for the next five years, in exchange for lifting sanctions.

Iran has reportedly tested weapons systems, which some experts said cast doubt on Iran’s claim that its nuclear program is limited to producing electricity. But arms expert Mark Fitzpatrick of the International Institute for Strategic Studies said that without proof, it is too soon to jump to the conclusion Iran is pursuing nuclear weapons. Nonetheless, in discussions at the United Nations, several countries kept pressure on Iran to suspend uranium enrichment until a monitoring deal is worked out.

Storm Brewing Over Clouds

paper in the journal Remote Sensing has generated a lot of thunder, since the authors argued their study of clouds suggested the climate is not as sensitive to greenhouse gas emissions as had been thought. But many other experts have poked holes in the study, with one arguing the controversial study’s model fails to conserve energy, so it violates a basic principle of physics. The journal’s editor resigned over the controversy.

Energetic Ghost Town

To test out new energy technologies in conditions between the overly controlled confines of the lab and the all-too-messy real world, a company is planning to erect in New Mexico a 20-square-mile, $200-million “ghost town” outfitted with real buildings—but no people.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

 

Comments

  1. Pete Clay
    VA
    September 8, 2011, 10:31 pm

    The Chinese are out investing in their solar industry by such an enormous margin compared to what has been supplied by the US govt that this “debate” is laughable. Over the last many years, the US has provided billions and billions of subsidy dollars to encourage coal based mountain top removal and the petroleum industry. Solar is a tough game and only a few of the most cost effective companies will survive, especially with China pumping billions and billions of dollars to pump up their solar manufactures. Fortunately, this has led to large scale solar production and prices for modules dropping to $1.50/Watt retail and falling, which is needed to allow Chinese and India to begin transition away from non-sustainable fossil fuels. The Japanese also have a hard time competing along with the Germans, but Japan has at last come to the conclusion that solar is the future. Solar is already cheaper than nuclear without the risks and for 20 year projects in CA is already cheaper than natural gas. Renewables are the future – either the US continues to invest or loses a trillion dollar market. Despite this failure, solar is the fastest growing US and global industry and the US is a net exporter of solar products. To compete in the future solar industry, which will be competive with all fossil fuels in the next few years, countries can either play to win or lose the war that China is determined to win with govt investment and true production scale. Its a global game – if you are afraid to lose – you have already lost, which is why ARPA-E is so important. Unfortunately, Replublicans have backed fossil fuel for too many years – to the detriment of our global competiveness. The future is renewables and electric vehicles – these are the job creators of our time – and the global market already understands this.