Is China destroying the solar energy industry?

-July 18, 2013

The NY Times reported on May 28 of this year that solar panels, covering a huge warehouse roof in east LA, began to fail only two years into their 25 year expected lifetime. Corners are being cut and most of the quality concerns center on China.

China manufactures the great majority of the world’s solar panels, but are flooding the market recently with below cost solar products severely hurting companies like SMA in Germany, one of the biggest developers of solar inverters. The Chinese government heavily subsidizes their solar products industry with the goal of increasing global market share even if it means selling products at a loss. Germany leads worldwide installations in the  world solar market with 7.6 Gigawatts of installations last year, down by 50% in 2013! They have recently had major layoffs.

It’s not the low prices that disturb me so much, but the fact that China is severely curtailing the technical innovation and cost-saving efforts of companies like SMA by forcing layoffs and cut-backs. It seems to me that not much innovation is coming from China, but they might be the “last country standing” in this drastically reduced pricing effort that will slow industry innovation and thereby putting the brakes on the solar market, just as it was gaining some momentum.

The European Union organization, EU ProSun, comprised of European professionals in the solar industry, is blaming China dumping strategy as a direct cause of layoffs and closed factories of over 30 European solar companies.

Solar World in the US is a recent victim of Chinese dumping with 100 layoffs announce on July 11, 2013. The company says that this will make them stronger, but the trends for layoffs worldwide speak very loudly for a severe slowdown of R&D efforts from many of these companies affected.

I’m not sure if stiff duties on Chinese solar products are the answer, but we need to come to some sort of agreement worldwide with all the key players including China, or every one of us loses.

Please weigh in with your ideas, experience and thoughts on this critical issue.

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