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Too Much Sun
Another Solar Panel Glut Looms on the Horizon

There’s no shortage of supply in the global solar panel market these days, but with the growth in demand flagging everywhere from China to Europe, a glut is once again threatening to drown producers. Bloomberg reports:

The manufacturers are locked in a race to build bigger and more advanced factories to crank out panels faster and cheaper. Just as they start rolling off the lines, demand is expected to slow, especially in China where the government rolled back subsidies last month. Prices are slumping, and suppliers expect margins to slip as well. It’s a pattern we’ve seen before, after a global oversupply five years ago drove dozens of companies out of business. […]

The solar industry went through a similar boom-bust cycle after capacity grew faster than demand, triggering a two-year slump starting in late 2011. The result was a wave of consolidation as prices plunged and panelmakers’ losses piled up. Cheap panels also helped spur demand for more solar power, eventually prompting the survivors to expand production.

If this is giving you a nagging feeling of déjà vu, that’s because we’ve been through all of this just a few years back, when China’s aggressive government subsidization of panel producers led to a massive oversupply in panels that demolished profit margins and forced some of the industry’s biggest players to fold.

Of course, falling panel prices will make this more of a buyer’s market for solar panels in the coming months, but before greens get carried away thinking that the day has finally come for renewables to supplant fossil fuels, remember that the panels are just one portion of the cost of a solar array—there’s also the installation, maintenance, and transmission lines to consider. Then, too, there’s the fact that solar can only provide power when the sun is shining, making it a viable solution for only peak electricity production (not baseload, like coal, natural gas, or nuclear). A dip in panel costs will help some consumers that might’ve been on the fence about investing in solar, but it won’t fix the intermittent energy source’s underlying problems.

This impending glut isn’t a sign of health for the solar power industry, but rather the result of a worldwide race to the bottom as producers have viciously competed for market share by continuing to up output, regardless of whether or not the demand was actually there. The sad fact is, while we may currently have plenty of them, today’s solar panel’s aren’t efficient enough to out-compete fossil fuels (like plentiful natural gas) on price. We’d be in much better shape if governments had devoted their focus on the research and development of better panels, rather than the propping up of companies intent on churning out more of them.

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  • Fat_Man

    You keep doing it. “We’d be in much better shape if governments had devoted their focus on the research and development of better panels”

    Not so. You demonstrated above that you know what the real problem is: The Sun sets every g-d#@&$ed day.* And, it is often hidden behind clouds, which can cut output by 75% Resarch cannot solve that problem. As a result solar panels must be supplemented by other systems, which will sit unused while the solar panels work. The capital cost of the second system will always destroy the economic viability of solar. Even if the panels were free, solar would not be viable.

    *I know the Arctic, where the sun sets once every six months. Of course the night is equally long, and you need energy then. Almost every discussion of solar energy seems to assume that most people live a sub-tropical area, where peak demand is in the afternoon.

    • f1b0nacc1

      I don’t have the cite handy, but you only get fully output from solar cells 4.5 hours per day here in the Midwest (it various from almost six in the southwest to a bit under 4 in the northeast). so you end up with a LOT more downtime with solar cells than with, say…coal.

      • chuck

        That is why we have batteries.

        • f1b0nacc1

          Leaving aside for a moment the extreme inefficiency of batteries, this means that if you want 24 Kw/hrs of power (i.e. 1 kw for 24 hours), you will need an installed base of at least 120 Kw/hrs (assuming perfectly efficient batteries, which of course doesn’t exist). This means that for every unit of electricity you wish to generate, you will need (assuming absolutely perfect storage, which again does NOT exist) six times your actual expected output. Batteries, with their exotic chemistry, poor handling issues, charging times, temperature sensitivity, high costs/weights/volumes, etc. are no solution to the storage problem. Their problems are tied to the inexorable truths of electrochemistry, a fairly mature science where few breakthroughs are likely. No unicorns here…

          As a minor point, the first time I ran across the commenter at the top of this thread (Fat_Man) he was eviscerating some silly greenie who was arguing that batteries were going to be the solution to the limitations of solar and wind.. This is in fact what prompted my reply to his (quite correct) comment here.

    • Blackbeard

      Your mistake here is to assume that we truly need reliable, low cost electricity 24/7. The Greens believe this is an unnecessary luxury and, at the moment, I’m afraid the “arc of history” is bending their way.

  • Bucky Barkingham

    In Shrillary’s latest TV ad she boasts that she will make the US the green energy world leader, claiming that she will invest in new high paying green energy jobs while showing video clips of solar panels.

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