Hu Jintao, president of China, the dominant producer of solar panels in the world, arrives in Washington, DC, for a State visit Tuesday. He arrives just days after one of America's largest producers of solar panels -- Evergreen Solar -- announced that it was, according to The New York Times, "closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China."
That should make for some interesting dinner conversation at The White House. It should also be the talk of Washington this week.
America has an opportunity to rebuild its economic preeminence through scientific innovation -- and solar energy conversion should be a high priority, given our scientific and technical expertise, our wealth of sunshine especially in the Southwest, and our availability of skilled workers who want and deserve jobs. The question is: Will the U.S. government support the American people in that quest?
In announcing the Massachusetts plant closing, Evergreen Solar's President & CEO Michael El-Hillow stated: "Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry. While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint."
And Evergreen Solar is not the only U.S. solar panel manufacturer cutting back. Solyndra, a California-based designer and manufacturer of solar photovoltaic systems, announced in November that it would shut one of its two American plants and delay expansion of the other. Ironically, Solyndra was named in 2010 as "One of the 50 Most Innovative Companies in the World" by MIT's Technology Review magazine and one of the "Top 10 Venture-backed Clean-Tech Companies" by The Wall Street Journal.
According to Sustainable Industries, "six weeks after Solyndra flipped the switch on the (new $733 million) plant last September, it announced it would close an older factory and delay plans to expand the new ... facility in the face of intense competition from low-cost Chinese manufacturers." "Meanwhile," Sustainable Industries continues, "the prospects for continued (U.S.) government support for renewable energy are looking increasingly shaky. A federal program that gave cash grants to cover 30 percent of the cost of multibillion-dollar solar and wind energy projects has been extended but only until the end of the year... And the federal loan guarantees that have been crucial to getting large projects built is set to sunset in September."
Fortunately, the United States has within the Obama Administration some of the nation's finest scientists, beginning with Nobel Prize-winning physicist and Energy Secretary Steven Chu. There's no question that they get it. The question is: Will they have the financial and legislative support within the government as a whole? Will the sun literally rise on our economy?
Ironically, one of our nation's leading proponents of solar power is lying in a Tucson hospital recovering from an assassination attempt. I pray for the full and speedy recovery of my friend Congresswoman Gabrielle Giffords, who, I hope, will soon again be leading the fight for American leadership in solar energy conversion. She recently participated in a major new grant-making initiative in solar energy conversion funded by the foundation that I lead.
In the meantime, we can be inspired by her words, just as we are daily by her example. In making the case for solar power, she has stated: "Solar power is an emerging industry with huge global potential. The worldwide market for power is over $6 trillion a year and growing fast, and everyone is looking for new, clean sources of electricity. Solar means good jobs and a competitive America. With solar power, the fuel is 100% domestic and free. There are no long supply chains to defend or rogue states to threaten our energy supplies. What's more, we don't have to send our hard-earned dollars overseas."
But will our nation follow that advice? As The New York Times states, "after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun."
How do we explain that to our grandchildren?
James M. Gentile is president and CEO of Research Corporation for Science Advancement (www.rescorp.org), America's second-oldest foundation, founded in 1912, and the first dedicated wholly to science.
Steven Chu: U.S.-China Clean Energy Cooperation Is Good for America and Good for the World
The world lived through the "Arab Oil Embargo" of the 70's. The United States and Denmark (I use them as a comparison only, it effected nearly everyone) were both heavy importers of foreign oil. (Denmark got 99% of it's energy from imports)
The Carter Administration formed the Department of Energy with the idea of making the US energy independent. (Or at least less dependent then it was)
Fast forward 35 years. Denmark is a net exporter of energy. It fully embraced renewable energy resources and conservation. The US imports more oil now then it did in the 70's. The Bush administration gave tax incentives to businesses that bought vehicles based on a high GVWR, which by their very nature are not fuel efficient. President Bush had ties to the oil industry, and was quite happy to further their interests.
US policy should be based on what's good for the country, not what's good for the party in power.
Why can Denmark do it, and we can't?
http://www.neatorama.com/2008/01/01/energy-independence-how-denmark-kicked-the-foreign-oil-habit/
Solar power is not there yet. We all know it. It's too expensive it can't compete.
America is broke. We can't afford to pay massive amounts of borrowed Chinese money to buy more expensive energy.
Big government is the problem, not the answer. socialism is not what we need.
Big government is NOT the problem, it provides the way for new research and technologies to be developed on a scale that most companies simply can't do.
http://www.nytimes.com/2008/06/20/world/asia/20china.html
China is also a net coal IMPORTER even though they have the thrid most coal reserves in the world.
http://www.eia.doe.gov/cabs/China/Coal.html
China's electricity costs varies by region from $42.03 per megawatt/hr to $61.37 per megawatt/hr
This comes out to .04/KwH to .06/KwH. But the costs are HEAVILY subsidized by the government and do not reflect the true cost. Average US costs are about .11/KwH.
http://www.nytimes.com/2008/06/20/world/asia/20china.html
http://factsanddetails.com/china.php?itemid=324&catid=13&subcatid=85
Coal produces twice the CO2 per kwh as natural gas.
I have buddies in management positions in Asia because their jobs got transfered there or they could not find work here. They are very good at their jobs! You don't think everyone of them would give their eye teeth to be back in America? Many have left their families here and get to visit only twice a year!
In life you play the cards you are dealt you can't ask for a re-deal!
Congress practices Free Trade like we were a protectionist economy, regulations to hurt manufacturing here and preserve the rights of the worker and environment but with an escape clause that allows our companies to manufacture off shore with no penalty. Whose fault is that?
We need environmental and maybe even social taxes and tariffs on how products are manufactured and transported to maintain our lifestyle and improve the worlds at the same time!
Capital drifts off; people become unemployable. There is a window of opportunity here.
In China, the opposite. They are determined not to import energy.
We have panels on our roof that have a 20 year warranty.
The loss of panel efficiency is more than compensated for the gain from not having transmission losses.
I've visited the massive new Suntech facility in China (created by Chinese-Australian Zhengrong Shi). It is largely robotic. There are no labour cost difference issues with this facility. I do not understand why it could not be viable in the USofA (or Australia)?
The issue is opportunist off-shoring Corporations looking to avoid local responsibility and taxation.
I'll come back to Malcolm's post shortly.
Unlike China (and most of the world) the concept of green energy in the US is controversial. Half of the people do not believe in it at all. To have the US government to subsidize green energy industry in the US is unthinkable. Even in MA, when gov Deval Patrick announced state benefits given to Evergreen, many people were largely upset. Unlike China the US has plenty of resources and low pollution, so American's naturally feel less urgency.
But I'm betting we'll be the last of the major players that enter into alternative energy.
History lesson - the world has always had cheap labor but the industrial revolution had to wait for the invention of the steam engine and cheap reliable energy!
Mr. Gentile, China is making all those solar cells with cheap dirty coal energy! Melting silica with electric arc furnaces in extremely energy intensive! We have lost much of the steel business because of the same reasons! That Californian manufacture of solar cells was competing with a 7 to 1 energy cost handicap!
The fast developing nations subsidize energy for manufactures and try to make it as cheap as possible! We try to make it as expensive as possible and blame the loss of jobs on labor cost!
Mr. Gentile, the U.S. government could come in and offer Solyndra to pay the salaries of each worker in their solar cell factory in California and they would still be more expensive than China!
We as a nation need to fix either our energy cost situation or add environmental tariffs on all products sold here!
I believe in Environmental Tariffs!
If you think about it, if you operate a power plant and you're importing coal from Australia (yes, most coal burnt in China comes from Australia), you're unit cost of production is pretty similar. The differences then come in capital and operating costs. A coal power plant doesn't have huge labour costs as a component of operation (compared to fuel). The capital/construction costs are cheaper, but their distribution network spending is much higher.
Building solar panels is not labour intensive; it's highly automated in the best facilities. I see no reason why the USofA (or Australia) can't get their act together on this.
That's why I said the federal government could pay all the workers at Solyndra and they still would not be close to being competitive!