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Solar Flare-Up
Chinese Firm Races to the Bottom of Global Solar Market

Yet another Chinese solar firm is doubling down on the race to the bottom in panel production. Yingli solar recently posted its 10th straight quarterly loss, and as Reuters reports, it plans to continue to produce solar panels at a loss to stay competitive in the wacky global market:

Yingli Green Energy Holding Co Ltd said it expects to return to profitability only in the third quarter, a year later than its rivals, as it sells panels at lower prices to gain market share.

Yingli’s shares fell as much as 13.3 percent on Tuesday after the world’s largest panel supplier by volumes posted its tenth straight quarterly loss.

The global solar market is deeply distorted. Governments around the world are subsidizing every step of the solar panel production chain, producing cheap (and often shoddily-made) products. This is nice for consumers, but it’s ultimately unsustainable. China is no stranger to bringing government support to bear on nascent industries in a bid to gain market share, but this shouldn’t be considered progress.

Rather than directly supporting the production of current-generation solar technology—technology which has proven incapable of competing with fossil fuels without government subsidies—policymakers ought to be diverting these resources towards the research and development of better renewable energy technology. Selling panels below the cost of production isn’t just bad for the producers making them, it has an opportunity cost as well.

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  • Jim__L

    How is losing money being “competitive”?

  • free_agent

    Heh… Solar-generated power will become economically competitive due to generous subsidies by the Chinese government…

  • Dan

    they sell every unit for a loss but will make it up in volume

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