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Chinese Solar Industry Goes Belly Up

One of the big arguments proponents of the ‘green jobs’ scam often bring out is that the argument that China, thanks to its support of green tech companies, will own the future while the United States is left behind.

Think again.  According to a report on Bloomberg, the Chinese solar power industry is on the ropes; massive over investment has run up against flat demand.  Margins have turned negative at some companies where solar panels can only be sold below cost.

“Demand has not lived up to expectations and pricing has collapsed over the last three quarters,” Aaron Chew, an analyst at Maxim Group LLC in New York, said today in an interview. “Most of the major cell, wafer and module manufacturers are poised to report four quarters in a row of losses and this is just the first one.”

The alternative energy market is still an artificial market; except for a handful of novelty customers rich enough to afford inefficient green tech, firms and households only choose green tech when subsidies bring the price within range or regulations force people to choose expensive green products.

Two years ago, when delusional greens thought they were on the way to a global carbon treaty, green tech looked hot.  But as that project collapsed under its own weight, the prospects for the green market withered.  The recession strengthened public opposition to expensive new green regulations, and the European financial crisis means that countries like Spain (which had a big alternative energy program) and Greece have no more budgetary room for frills.

Solar power has been touted as the next big thing since the 1970s.  After forty years of failure, it may be time to think about solar power the way people used to talk about Brazil:  it is the industry of the future — and always will be.

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  • Luke Lea

    “the Chinese solar power industry is on the ropes; massive over investment has run up against flat demand.”

    Typical error in a centrally planned economy. I think we under-estimate the importance of this old piece of Hayekian wisdom, at least when it comes to China: prices are information in a market economy. Without real markets you are flying blind. China is still a communist society we tend to forget. The consequences are predictable.

  • Mark

    I don’t know what’s going on with solar industry, but I know that solar power solved my energy efficiency problem.I was able to find correct and well researched instructions for creating a homemade solar power system.

    When all was finished and after a year of usage I noticed that my energy cost was reduced by 60%, which is pretty good. The cost for building the solar system was way lower than the publicly known cost. Companies charge too much for implementing such a system.

  • Dale

    Mark says:
    November 26, 2011 at 5:36 am

    Whens your break even on investment/labor?

  • Corlyss

    @ Mark:

    Bully for you. I ain’t gonna do that. God invented Edison so I don’t have to scrabble about looking for an energy source sufficient to sustain me and mine. That’s the problem with all these boutique energy bubbles: they are fine for onesies and twosies but forget about large scale production and delivery. They never will be IMO without confiscating 100% of my income in taxes to support these otherwise inefficient and extremely finite options. I won’t have it. If I have to move out of the country, I won’t have it!

  • fiftyville

    Be careful, folks. Mark’s site is reported as a spam domain.

  • PacRim Jim

    When governments run industries, inefficiencies abound.
    Try capitalism and let market forces weed out the inefficient.

  • Harun

    Actually, China combines the best
    and worst of capitalism and central

    They get band wagon investments like
    crazy because there are so many subsidies
    and the like – hey I want to start a solaer
    firm, let’s get a billion from Wal Street
    without any working factory, then free
    land from some provincial government,
    some other subsidies and cheap loans,
    and voila we will make millions.

    The problem is 100 other people had the
    same idea and everyone loses money.

  • Chris

    Solar power has been touted as the next big thing since the 1970s.

    Absolutely right. I was going through some old teaching materials a few years ago and I found some reading comprehension passages and quizzes. The title of one unit was “Solar Power – The Energy of the Future”. The copyright year was 1977.

  • Jim.


    It’s worse than that, even. There’s an old Bell Labs educational filmstrip from maybe 1950 at the latest with a name like “Our Friend Mr. Sun”. It goes through a whole set of gee-whiz discoveries in the making, from bluegreen algae crude oil to solar power.

    Maybe we live in a world of accelerating change, maybe we don’t. (Winston Churchill’s view of American history puts the forty years of greatest change for America as being the decades from 1856 to 1896, and I’d be hard pressed to argue against that.) But what seems certain is, our view of “the future” is somehow awfully static. Strange.

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