Prospects Darken For Solar Energy Companies 435
Hugh Pickens writes "Although global demand for solar power is still growing — about 8% more solar panels will be installed this year compared with 2010 — bankruptcies, plummeting stock prices and crushing debt loads are calling into question the viability of the solar energy industry that since the 1970s has been counted on to advance the world into a new energy age. Only a handful of manufacturers are now profitable in the face of too much capacity, which has contributed to a plunge in prices as government subsidies have been curbed. Prices for solar panels started 2011 near $1.60 per watt, but a buildup of inventory forced manufacturers into a fire sale toward the end of the second quarter that has pushed prices to near $1 per watt now. 'The prices that we're seeing today are likely not covering manufacturing costs in many cases,' says Ralph Romero. With at least seven solar-panel manufacturers filing for bankruptcy or insolvency in the last several months and six of the 10 largest publicly traded companies making solar components reporting losses in the third quarter, public-market investors are punishing the solar sector, sending shares down nearly 57% this year. Although winners are expected to emerge eventually, the question is how much more carnage there will be before that happens. 'The fact of the matter is, nobody really knows which solar companies will be pushed out of business or be forced to merge,' writes industry analyst Rodolfo Avalos. 'Nobody also knows how long it will take for the solar industry to improve even when the forecasted solar global demand for the next 5-10 years is quite promising.'"
the TFS only talks about the economics (Score:5, Insightful)
The summary does not mention the actual need for prices on solar panels to drop to make them more viable, only on the economic repercusions of the shift in the market.
I thought to myself one day that this was one of the necessary evils or events in a free market economy, prices must shift and therefore allow more efficient companies and technologies to emerge. Any real change requires chaos.
You wanted change? Here you've got it.
Re:the TFS only talks about the economics (Score:4)
Re:the TFS only talks about the economics (Score:4, Insightful)
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Re:the TFS only talks about the economics (Score:5, Informative)
Re:the TFS only talks about the economics (Score:4, Interesting)
http://www.sunelec.com/blog/ [sunelec.com]
$0.59 laminates and $.78 panels.
oops, forgot to sign in before posting.
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Free Market at Work (Score:4, Insightful)
How is this a long term bad thing? Either the industry will come up with an idea that will allow a marketable solar power system sans subsidies and thus thrive, or it will die and we can move on to the next idea instead of wasting engineering hours on a failed/NRFPT energy source. In either case we win.
This is not necessarily unusual (Score:4, Insightful)
Recall the workstation industry in the late 80s and early 90s?
Many companies, many failures, a few survivors.
Couple that with the suck economy, and anyone who guessed wrong on the timing of the recovery, is in a tricky place.
Just wait until Iran blocks the Strait of Hormuz (Score:5, Informative)
Re:Just wait until Iran blocks the Strait of Hormu (Score:4, Interesting)
Re: (Score:2, Interesting)
Actually, gas and coal do not power UPS/fedex/USPO/semi-trailer trucks, or pacific ocean container ships. Both for the end user delivery and delivering raw-ish materials to the manufacturers.
Try going to a solar panel distributor and ordering a bunch of panels, made in the US or china doesn't matter, the shipping cost of sending a truck out to you full of delicate glass is really quite high.
I'm told that on islands almost all electricity is generated from stationary diesels. In the continental US it doesn
Re: (Score:2)
Fark wrote the headline in a more humorous fashion, "Iran threatens to sink own navy if its demands aren't met".
Someone else pointed out that the biggest competitor to solar is Coal - the magic point where solar is cheaper than coal is around $1 per watt - keep in mind that the US of fuckin' A is the "Saudi Arabia of Coal". Yep, that would really drive up global oil prices, but the US has been a net exporter of oil now for about 6-8 months, yes, net-exporter of oil, and we have enough coal reserves
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...but the US has been a net exporter of oil now for about 6-8 months, yes, net-exporter of oil
Ummm... no. You've confused crude oil with refined gasoline. The US is still a major net-importer of crude oil, but, yes, it's exporting quite a bit of refined gasoline now.
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You don't think you should be measuring energy in terms of energy, rather than power?
Nope. The units actually used in the electrical power business are around $1000/KW.
So a GW class plant probably costs about a gigadollar to build, from "thinkin' bout it" to putting it on the grid.
Yes I'm well aware that the capex of a coal plant is well under $1000/KW (or at least, it used to be?) however for solar, the fuel cost and endless maint cost is quite a bit lower, not to mention the ongoing labor cost which for a truly big solar plant basically rounds down to zero, although a coal plant employes
Re:Just wait until Iran blocks the Strait of Hormu (Score:4, Informative)
Not at all.
That is the big lie. Solar != oil at least in the US.
Solar makes electricity. One percent of the electricity in the US is from oil. Solar and Wind make up more than 3% of the US production. Solar at best competes with coal and natural gas. The thing is that for every kw of wind and solar the power companies build one kw of gas fired peaking plants to handle cloudy days and still days.
Oil is mostly used for transportation. You can not "practically" power ships, aircraft, and large long haul trucks with electricity. Electric cars are still very rare and even if they become popular it will take many years for them to grow to a large percentage of the market. Trains also use oil in the US but in theory at least some could be electrified but again that would be a multi year project and cost many billions of dollars.
The whole solar and wind can free us from oil is a marketing lie.
Subsidies in the wrong place. (Score:5, Insightful)
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This works great to get efficiency up. We've got pretty efficient cells now though and the INSTALLED pricing of them is still sky high despite whatever price per watt they cry about at the wholesale level. You need to incentivize adoption not production right now. No one is buying this stuff if they are struggling, not with payoffs measured in decades. Electricity bills for me are under $200 a month and a panel install of decent size would cost tens of thousands of dollars, the math doesn't add up. The grid
Then you just get beer research (Score:2)
Which is basically anything at all as long as it involves buying large quantities of:
1. micro organisms (yeast).
2. Large vessels.
3. Energy to keep it all warm.
If someone is subsidising their countries product X, everyone else is better placing product X on an import duty roster cancelling the subsidy.
Otherwise you are taking money from people who need it and giving to those who don't.
PV isn't the only Solar (Score:2, Interesting)
Its important to remember that photovoltaic technology is not the the sum total of solar energy. In many ways concentrated solar much more applicable to the industry when discussing competition between solar, natural gas, coal, and nuclear. These power plants exist and are being built in the western US as we speak, although some subsidies are still required to make it competitive with coal.
http://en.wikipedia.org/wiki/Concentrated_solar_power (wiki)
It is the customer base stupid. (Score:5, Insightful)
China flooding the market, specifically to destroy the competition IMHO, is just half the story. How are people supposed to buy solar panels for the house when they are not even able to make the house payments. Small business owners aren't going to throw up panels any time soon. They rent. Renters aren't going to put up solar panels, their customers are going out of business left and right. Manufacturers with large plants are too busy deciding if they are going to relocate. China needs to learn to let other people make money. A customer base requires someone has an income.
I this really surprising? (Score:3, Informative)
which has contributed to a plunge in prices as government subsidies have been curbed
Corn costs more to produce than we (or ethanol manufacturers) pay for it. [wikipedia.org]
Coal power has higher costs than we see. [sourcewatch.org]
This is all because of government subsidsy. In the case of corn it keeps the price of corn artificially low and the farmer paid. The problem now is that many subsidies have outlived their usefulness but continue own because of the political clout of the companies/groups recieving them, and right now, the government has little or no money to subsidize other things. To me at least, it would make sense to subsideize a promising technolgy and give it a boost, instead we always cut the new guy, while the old belchers with the power, clout, and money (having extra saved from subsidies helps) get paid.
Okay, this is pretty simple IMO! (Score:5, Insightful)
Look, I WANT solar power on my home. I have a good location South facing, near full time sun during the day, am tech oriented, and I'm not dirt poor! I get HomePower magazine, I track the technology, I'm a buyer looking to do this.
So why don't I have it? Because my home like so many others is upside down and the cost of a solar install of decent size is looking like $30K or more which will be saving me something like $150 a month on my electric bill. How exactly does THAT make sense? Prices are down per watt? You could've fooled me! The price of raw cells on the wholesale market may have dropped some but the installed price is in the stratosphere IF you can even find a company local to you willing to do it.
There's a company near me advertising solar LEASING like crazy. They install and maintain the system and you pay them a monthly fee that's lower than your existing electric bill. Now this sounded possibly interesting despite my trepidation about anything that says "lease". I tried to sign up for an estimate - they don't service my area! Say what?! These guys are putting out printed ads and radio like mad here and then won't take my money? Kripes it's like trying to get high speed internet all over again! SolarCity -> asshats!
Now I know that my area isn't big on subsidies and it's also not someplace like Fla. where the sun roasts anything not moving but there's good potential in my site just no damned affordable way to do it no matter how much these guys claim to have reduced cost. Certainly installing solar makes huge sense in many ways but if the pricing is going to be $30K per house in a market where people are $40K upside down or more with a payoff measured in decades I think the reasons why few are buying are pretty damned clear! The local and federal Govt subsidies need to crank up, this is infrastructure we're talking about and it needs to be supported IMO. This is the technology that can take loads off our grid, why isn't there any incentive to go for it?
P.S. My neighbors just had to cut down all of their trees that used to shade the front of my home during parts of the day. It was awful but I now have no obstructions and full exposure but cannot take advantage of it. This sucks!
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If Gov't subsidies "crank up" and everyone takes advantage of them, then there is no economic advantage.
Think of it this way - if everyone in America wanted a widget, and that widget cost $100, but people were only willing to spend $50 on the widget, the gov't could step in and subsidise each widget to the tune of $50/each, spreading the cost of the subsidy over all Americans. If "everyone" took the Gov't up on the offer, then each person would be paying for their own subsidy ($50/everybody x everybody = $5
Re:Okay, this is pretty simple IMO! (Score:4, Interesting)
You're looking at it wrongly. I recently had solar power installed because - long term - it pays off.
Let's say your numbers are correct. $30k to install. $150/month saved. That's similar to my situation in the UK.
Your payback period is about 17 years (although potentially longer if you had to take out a loan to pay for them).
Most solar panels are guaranteed for 25 years (or, rather, their operating performance won't drop by more than a certain percentage per year).
So, for the remaining 8 years, you're earning $150 per month - that's $14k. That's not a terrible ROI.
However! What if there's an energy crisis? All of a sudden, you're saving $300 per month. Or, depending on where you live, you can sell your excess electricity back into the grid for a profit.
Worse case scenario, the cost of electricity plummets and you're left with an overprices UPS on your roof.
I say go for it!
Re:Okay, this is pretty simple IMO! (Score:4, Insightful)
Re:Okay, this is pretty simple IMO! (Score:5, Insightful)
When looking into the real cost of solar I found that my homeowners insurance premiums would skyrocket. This ate into the payback significantly. Secondly all these rebates etc require professional installation the installers know it and have jacked up there prices to match the panels are 18-27k (90 $200-300 panels 100 watts each, and I can get them much cheaper) the installers all quote in the 50-60k range all the incentives and rebates knock it back down to 20-30k so effectively the installers are pocketing the rebates. I've seen this before whenever the rebates require professional installation.
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17 year is crazy
you will get a lot more bang for your money insulating your home to use less energy, buying more energy efficient appliances and electronics, and
GASP, buy your movies and music and don't rip them to hard disk and have a SAN or server running 24x7 in the closet sucking up juice
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cost of a solar install of decent size is looking like $30K
Its the greenies and the middlemen. That's really a $15K system with a lot of people making a profit in the middle and at least some of the customers simply don't care what it costs so prices rise accordingly.
Look into doing it yourself instead of hiring a general or specialized solar contractor, trying to buy as far upstream as you can, etc. You can say that endless be-your-own contractor paperchasing BS is a lot of work compared to watching a star trek rerun, but then again lowering your costs by the c
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In fact the CEO would like it to cost as much as possible, so he has something to brag about on the golf course, I'm so wealthy I spent $50K on my installation that we on /. know is only worth $15K.
A better way to rephrase that, would be imagine what the consumer electronics market would look like if the market were small enough that a very large fraction of the market was audiophools, the $1000 HDMI cable type of people.
Sounds like a chance for entreprenuership (Score:2)
The problem you described sounds like an opportunity for someone to create a company which will pay to install a solar panel on a homeowners' roof, but the panels remain the property of the company, while the homeowner pays an electric bill to the solar panel company.
Sort of a "solar utility company". Now, you say, you'd like to get away from "the electric company" - isn't that the point of solar panels? Well, if the choice is between the local utility monopoly, or a solar utility company, and if the solar
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It is going to cost me about $20K to have the trees removed that currently shade my roof... the cost going green!
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So why don't I have it? Because my home like so many others is upside down
Am I the only one who doesn't know what the hell you mean by that?
there's a big money issue.... (Score:4, Informative)
Here in Italy, solar has been heavily pushed via two mechanisms: one is that via tax rebates, building a solar plant is incentivized. the second is that ALL the energy produced is retired by the grid at a heavily increased price, and the increased price is then passed on to the consumers via the electricity bill. Private use is incentivised even more, since there's a counter at thee production level: a user/producer gets paid the higher price on all production, and pays his consumption at the lower general level. It goes without saying that this is a much bigger incentive than using a "net" mechanism, by which only the excess energy produced over consumption gets paid.
The necessary build of conventional energy plants to guarantee continous production is done by the general electric utilities, and spread on the bills accordingly. The construction boom has been huge.
The rationale behind my saying that this will all end up in public hands is that most of the "industrial" establishment of solar plant has been funded by banks, with little money coming out of the equity investors' purse. An uncontrolled shrinkage of the incentive schemes would cause a big banking problem; helping the banks is not considered the thing now; and taxing Joe Public to give money to people who could convince banks to sink millions into a tax haven is a problem too, so nothing like a giant nationalization of the existing plants would work.
Would it help the First Solars [firstsolar.com] of the world? nooooo, because as much as public servants love to spend other people's money, many other investments are more profitable even on a CO2 standpoint. in less than 10 years, the city where I live [wikipedia.org] has become the first in district heating in Europe; the local utility built, in less than three years, a combined gas and steam plant that by selling surplus heat in winter reaches an efficiency of 85%.
ALL subsidies are bad (Score:2)
Subsidies distort the market and are, let's be honest, just a way for corrupt politicians to use our money to pay off their big supporters. Funny how so many of those companies going bankrupt were big Obama supporters... and got juicy loan guarantees.
I'll be straight with y'all: no political party or politician is smart enough to properly apply a subsidy even if they do it from the noblest of motives. We need to remove the ability of our government to do it in any fashion and we'll all be better off.
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I disagree. A subsidy on installations of high efficiency panels at the end user level makes sense IMO. The problem here is that prices for the end user are sky high with returns taking decades to payoff the investment. The benefit to having these installations, as a nation, is lower load on our grid. that's like being able to take trucks off of a heavily traveled highway and thus not have to repair it and widen it every couple of years. How is that not a good idea?
I agree that a subsidy done poorly is a ba
Unsurprising - given what solar is (Score:2)
Solar power [wordpress.com] just isn't viable without energy storage [wordpress.com] on a large scale. Without that, it only works as a supplement to a reliable power supply that has already been established, shaving a few percent off the fuel usage before causing serious trouble. (On the order of 3-5%, at which point it makes up some 30-50% of peak power demand.)
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There are many ways to store heat from solar plants. [wikipedia.org] Solar power is not just panels.
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Hardly surprising... (Score:5, Insightful)
Wouldn't it be great if the Solar Panel industry was able to succeed or fail based on the merits and the value of thier products, not be tossed about by the whims of politicians who shovel money into anything that looks "green" wihen they are up for re-election? The politicians, desperate to curry favor with certain constituant groups tosses obscene amounts of money into companies with trivial advancements.
The Government builds up manufacturing capacity with grants and low-cost, gov't backed loans, then they subsidise the purchase of solar panels by end-users to create demand for the panels, then they force utilities to pay well above market rates for whatever power the solar panel owner pumps into the electric grid, without allowing the utility the ability to manage the flow of electricity onto their grid.
And what is the argument for investing ever more money into the solar panel industry? We have to keep up with "threat" of China's investments in their solar panel industry. Here's the problem - first off, solar panels are on their way to being a commodity, and China excells in that space (manufacturing commodity items), second, China has the money to invest in these projects we don't (we perversely are borrowing the money fo fuel our "green initiatives" from China!).
Solyndra was in the $3/watt solar panel business when the industry was going from $2.50 -> $1.60 -> as low as $1/watt solar panels now - Gov't shouldn't be in the business of investing in businesses it subsidies and regulates - it has the ability to create a false market, subject to the political needs of elected officials, not and real demand on the part of the consumer.
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That would be great for every technology. However we live in a time where the demand on money to develop something new is astronomic high.
Without poitical will and legislation no one is able / willin to spend that (needed) money.
Would cars have catal
Re:Hardly surprising... (Score:5, Informative)
How about removing the subsidies from the other industries first?
Re:Hardly surprising... (Score:5, Insightful)
Gov't shouldn't be in the business of investing in businesses it subsidies and regulates - it has the ability to create a false market, subject to the political needs of elected officials, not and real demand on the part of the consumer.
Nuclear power would disappear overnight if the Government ended its practice of backstopping their insurance.
Nobody would make vaccines without the Government shielding pharmaceuticals from liability.
Shipping costs would be rediculously higher without a government subsidized system of roadways.
The dairy industry would be fucked without the Government's price support program.
You call those things subsidies, I call them good public policy.
The free market does not always make the best choices for everyone.
Solar energy is more than just panels (Score:2)
Solar energy can beused in a variety of ways, panels are only one of them. While panels are receiving tremendous hype lately, the fact is that they are the least effective way. Solar plants have double the efficiency of panels, and are cheaper as they only need ordinary mirrors. For individuals, using a solar collector for heating is much cheaper and saves more energy. And while solar panels could be useful on vehicles, they are too weak for that. Solar panels are dying for a reason.
This is not an industry problem (Score:3)
Didn't we see something similar happen in the PC industry when it was just getting started?
Does solar energy actually make sense? (Score:2, Informative)
New York City is home to 8,175,133 people as of 2011. It uses 64,500 gigawatt-hours of energy per year. Using a standard industrial solar panel (ex Trina Solar 230) which produces 5750 watts (assuming constant supply 5.75 kWh) with a base area of 17.6 sq feet and costs $360. To power NYC it would take 11.2 trillion panels taking up an area of 7081 square miles of solar panels, at a cost that of $500,000,000 per NYC resident.
NYC is also one of the most energy efficient cities in the US. Other cities would re
Yes, if you double-check your numbers (Score:4, Informative)
Something went seriously wrong in your figuring to come up with $500 million per person. It should be under $5000 per person or $34.5 billion total - if your run the numbers like I did below in Python (assuming these panels only produce for 8 hours per day, which is a number I just pulled out of the my hat).
Throw in extra for installation costs. It would be interesting to know what the total area is of NYC rooftops that have good sun exposure.
ny_area_sqmi = 302.6
ny_population = 8175133.0
ny_demand_watt_hours_per_year = 64500 * 10**9
panel_watt_hours_per_year = 230 * 8 * 365
panels_needed = ny_demand_watt_hours_per_year / panel_watt_hours_per_year
panel_cost = 360.0
panel_area_sqft = 17.6
total_cost = panels_needed * panel_cost
total_area_sqmi = (panels_needed * panel_area_sqft) / (5280**2)
print 'panels needed', panels_needed
print 'total cost $ %.2f' % total_cost
print 'cost per person $ %.2f' % (total_cost / ny_population)
print 'square miles %.2f' % total_area_sqmi
print 'percent area of nyc %.2f%%' % ((total_area_sqmi / ny_area_sqmi) * 100)
------
panels needed 96039309
total cost $ 34574151240.00
cost per person $ 4229.19
square miles 60.63
percent area of nyc 20.04%
And Hon Hai just entered the business (Score:3)
The article misses that Hon Hai, the parent of Foxconn, the company that really makes Apple's products, announced last week that they were going into the solar business. The reaction in the industry was that they will force prices down.
(Hon Hai is a very big company, with over 400,000 employees.)
You guys wouldn't make good investors (Score:3)
Because, really, virtually nobody here actually understands what is going on. So I will throw some light on the matter.
There are two big problems with solar energy in the U.S. right now.
The #1 problem is that the U.S. is in the middle of a natural gas bonanza that started about a decade ago but really only started ramping up around 2007ish... and kept ramping up right on through the crash and is still ramping up today, with no end in sight. This has caused domestic NG production to go through the roof and domestic NG prices to fall through the floor.
Power companies switching from coal are going right to natural gas, which has 30% (or better) lower emissions and low prices for at least the next decade. It will take that long for our LNG export infrastructure to ramp up enough for world markets to relieve the downward pressure on domestic natural gas prices. In anycase, just switching to NG allows power companies to meet EPA requirements for probably the next decade (or longer), and that's without any magic technology to make it even cleaner.
Natural gas used to only be used for peaking plants, except in California where they started to also be used for base load earlier than other parts of the country. Now natural gas is being used for base load across the board (along with nuclear). Nearly all of those coal plants undergoing decommissioning are being replaced with natural gas plants, not solar or anything else.
The #2 problem with solar energy is China's overproduction of solar panels. China has no problem destroying their environment with the chemical leavenings from the production of solar panels. Chinese companies are facing the same problems that U.S. companies are facing with prices plunging, but they have a much lower cost of production. The result is that non-chinese companies basically can't compete (under ANY circumstances).. because we aren't willing to destroy our environment like the Chinese are.
This has created a massive drop in price for the bulk panels that large businesses (like Google for example) can purchase. Consumers cannot get at these prices, we just don't buy enough panels, but even so prices are going down for us too.
This, in turn, has created a huge problem for solar thermal power companies, because the price of bulk panels has dropped below or near par to the cost of constructing a solar thermal (mirror based) energy plant. This makes the ongoing cost of a solar thermal plant, which requires significant maintainence and has parts with limited life spans due to thermal cycling, higher than the near zero running cost of an installed conventional solar panel closer to the buyer (typically on the roof of the business premises).
Numerous other factors are also creating issues. Germany was the single biggest purchaser of solar panels for the last decade due to massive government subsidies. Those subsidies are now winding down, which only makes the market glut worse.
And that's the problem in a nutshell. Even the most environmentally minded person has to realize by now that it is impossible to go from coal to solar in one step. Natural gas is the only thing we have in-country that is even remotely capable of replacing coal at the generation levels required. I will applaud government investment in solar energy but anyone who thinks that solar can actually replace fossil fuel is fooling themselves.
-Matt
If the visible hand of government lets go (Score:5, Informative)
What keeps the solar power industry from taking off is not the market. It's the subsidies that keep fossil fuels artificially cheap.
Subsidies like spending a trillion dollars to keep military control of producing countries, like fucking up the planet for the future generations, and so on.
Re: (Score:2, Informative)
I think he meant "fossil fuels are subsidized to produce", not necessarily the end product.
Fossil fuel subsidies vs taxes (Score:3)
Now, it depends on how you count 'subsidies'. If you go whole greenpeace and count the entire US Military, not charging for carbon emissions, extraction leases for $X instead of $10X all as subsidies, yes, we subsidize oil quite a bit.
If you believe that we aren't actually spending all that much money on ensuring the oil supply - IE Afghanistan doesn't produce significant amounts of it, Iraq was Bush Jr 'finishing' Daddy's work, think a lease for $X is a lease for $X, and discount carbon emissions as a cos
Re:If the visible hand of government lets go (Score:5, Informative)
It is very easy to find tax exemptions for oil and mining exploration. There are even sections in the 1040 instructions for it. I am not a tax expert, but clearly there are government subsidies for fossil fuels.
Re:If the visible hand of government lets go (Score:5, Informative)
1. Extremely high taxes on the nuclear fuel (â145 per gram of Uranium or Plutonium). Despite them, nuclear energy stays profitable and has never received a single cent of subsidies.
2. Extremely high taxes on gasoline and diesel fuel, which currently constitute about 60% of the end price, or about 90 Eurocents per liter
3. Taxes levied on electricity contain a special tax that goes to renewable energy subsidies. Currently this tax is about 3.5 Eurocents/kWh. About 2/3 of this tax are for solar power subsidies only, which provides about 1% of total electricity generation.
Re:If the visible hand of government lets go (Score:4, Insightful)
I would also point out that nuclear plants have a very high decommission cost and risk. Even with very high taxes nuclear can be a net cost to governments.
So I think the energy picture is complicated and interwoven with many issues. There is not a single solution. And it is wise to put our eggs in many baskets.
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Germany also has one of the highest ratios (approximately 20%) of renewable energy production precisely because they tax non-renewables and subsidize green energy. Germany is the exception, not the rule.
Huge government subsidies in the form of never-ending wars in the middle east and military technology investment have led to our dependence on fossil fuels... I'm not sure why you're against a similar method of weening ourselves off of them.
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1. Extremely high taxes on the nuclear fuel (â145 per gram of Uranium or Plutonium). Despite them, nuclear energy stays profitable and has never received a single cent of subsidies.
http://en.wikipedia.org/wiki/Nuclear_power_debate#Indirect_nuclear_insurance_subsidy [wikipedia.org]
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It is very easy to find tax exemptions for oil and mining exploration.
All companies get to deduct their costs. Companies pay taxes on profits, after costs. Each industry has it's own tax rules for keeping track of costs, becuase the historical loopholes that need closing are different for each industry. R&D expenses are always a cost, in every industry - that's not a subsidy. Capital expenditures are always handled through depreciation (even though you buy a factory/oil field/whatever this year, and incur the full expense this year, you have to spread out that expens
Re:If the visible hand of government lets go (Score:5, Informative)
They are both, subsidized AND taxed. Not everywhere in the same way, though. Did you know the UK subsidizes oil extraction in the north sea? The reason is of course cronyism and corruption.
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They are both, subsidized AND taxed. Not everywhere in the same way, though. Did you know the UK subsidizes oil extraction in the north sea? The reason is of course cronyism and corruption.
Corporations are subsidized while citizens are taxed.
Re:If the visible hand of government lets go (Score:4, Informative)
HAHAHAHAHA. Oh, god, I haven't laughed like that in AGES. Not subsidized... LOL. What do you call the Iraq War? Our gifts to Saudi Arabia? Our support for tin-pot dictators across oil producing regions? Our unwillingness to tax the pollution caused by fossil fuels?
Not subsidized. Right. It'd be like saying "We're going to buy everyone a solar panel and hook it to the grid, but not we won't subsidize the sun's production of light, so no subsidies there!"
Get a clue - fossil fuels are the most heavily subsidized product on the market. The subsidies are not as direct, but they're pretty fucking obvious from an economic standpoint.
Re: (Score:3)
Just a side note... I don't think any worthwhile comment has ever started out that way.
Re: (Score:3)
1. Bush Jr. 'finishing' what his father started. Also, Iraq isn't a significant oil producer, and if we were doing it for the oil, we would have done it differently.
2. What gifts to Saudi Arabia? They pay to be protected by our military.
3. What about our support for tin-pot dictators outside of oil producing regions?
4. What about our unwillingness to tax pollution that's NOT caused by fossil fuels?
but they're pretty fucking obvious from an economic standpoint.
Maybe, but you didn't list them. Indeed, plug reasonable numbers into the subsidies/tax balance sheet an
Re:If the visible hand of government lets go (Score:5, Informative)
Source. [tnr.com]
You were saying?
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Yes but how many people use solar energy. Is it even 1% of those who use gas? More to the point how much energy is produced by those subsidies? Yes these questions are rhetorical but I welcome actual responses with real figures.
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1. Germany's subsidies ARE NOT on par with the world. In most cases, they're the leader in total subsidization.
2. They have a larger install than most other countries as a result of #1.
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The problem with the whole "solar got more, no oil did" subsidy argument is that the solar companies are handed a pile of cash by the government and that's the sum of their subsidies. The oil companies write off the expense of failed exploratory wells and that's called a subsidy when adding up that total by groups promoting solar but all kinds of businesses get to write off expenses so it's not really some special oil industry thing. They also pay low rent on government owned land where they get the oil.
How about finishing the quote? (Score:5, Informative)
The next two lines in TFA:
Granted, these raw totals obscure a few things (if you looked at dollars per unit of energy delivered, oil and coal subsidies would be smaller than wind and solar). But the overall disparity is stunning, given everything we know about the harm fossil fuels are doing.
For some reason, they didn't look at subsidies in $/kwh. It's not like they're hard to find on the web [globalsubsidies.org]. That source puts fossil fuel subsidies at 0.8 cents/kwh and "renewables" (non-nuclear, non-hydropower) at 5 cents/kwh.
Simply not true (Score:3)
Re:Invisible hand of the free market (Score:5, Insightful)
Only if we allow it to. Right now it can not, because the prices are being manipulated by government subsidy. Not just the solar energy prices, but those of coal, nuclear, and wind as well.
It is a lesson we continually fail to learn: Industries built on government subsidy suffer when those subsidies begin to go away, even if the product itself is sound.
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The harsh reality is that anytime a government payout is involved, companies and organizations will emerge whose entire raison d'être is to exploit those payouts. A lot of those solar companies included big government subsidies in their business plans, and most of them knew damn well that they couldn't possibly be profitable without them. Another subset (and I *hope* it's just a subset) were likely straight-out hustlers looking to quietly pad their individual pockets with a Uncle Sucker's payout and th
Re:Invisible hand of the free market (Score:5, Insightful)
No, the lesson we refuse to learn is not that "gubment subsidy baaad mmmkayy!" It is that government subsidy needs to be A) predictable over the next decade and B) taper off gradually.
To the extent that the nations have done so, the intended stimulation of the solar industry has worked. Where they have pulled the rug out fast and early, they've caused uncertainty in the investment market. Sometimes intentionally, I would conjecture, given the rhetoric many of those responsible for policy are spouting and the incestuous relationships with established energy sectors many of them have.
Note, though, that a bunch of companies going bankrupt when a sector transitions from its initial phase to the established industry phase is well recognized by economists to be normal, with or without government subsidies. There really is basically nothing unusual to see here, just some trade rag journalists trying to keep their readers subscribed through exaggeration.
Re:Invisible hand of the free market (Score:5, Insightful)
It is a lesson we continually fail to learn: Industries built on government subsidy suffer when those subsidies begin to go away, even if the product itself is sound.
The lesson "we" continually fail to learn is that not everything is a vindication of one's favorite economic-religious theory. Every time there is an increase in demand for something, investments pour into the relevant industries far in excess of that demand, and most of those ventures fail before a handful of them succeed and become the dominant players. There's nothing magical about either the market or subsidies. Subsidies are just market forces, like weather influencing crop prices or international trade policy influencing imports and exports. The theoretical free market in which prices are not "manipulated" does not and cannot exist in the real world because it is ultimately based on human beings, and humans manipulate everything they can. It doesn't matter whether the influx of cash comes from subsidies or sales: companies benefit while the cash flows in, and they suffer when it stops flowing. Money is money.
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Companies going bankrupt is the invisible hand of the free market, they overproduced and stockpiled, based of forecasted growth, the real shame here is the closing line of the summery showing how we never really want to learn, saying demand is looking good for the next 5-10 years, their are no certain bets.
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Re:Invisible hand of the free market (Score:5, Insightful)
Don't worry, I'm sure the invisible hand of the free market will step in and all will be OK.
That would be true if there weren't actors like China distorting prices in the market by dumping government-subsidized-manufacturing-produced solar panels on the market at below-cost rates in order to destroy foreign competition.
Free markets only work where there is a fair market. When governments step in to "tip the scales" in order to influence the market, there is no "free market". Same thing applies with Capitalism. As can be seen with the US, when the government steps in to prop up certain businesses and tear down others in an effort to engineer certain outcomes and societal directions, the result is not Capitalism, it's "Crony Capitalism", and that hasn't worked out so well for US citizens.
Strat
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China seems to have a model they use to undercut us on manufacting. They start out cheap and with massive government assistance. Once our companies go under they move up a bit and make some profits. Plus their workers are often treated like fodder.
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Exactly, there is a difference between aid and investment. Dumping below cost products, which is what "aid" usually amounts to, is highly destructive to those being "helped". Much better would be to invest in infrastructure, education, or to provide loans for farmers. But doing the latter actually helps nations getting out of poverty, and therefore from out of the yoke of rich nations. Since rich nations obviously have an interest in keeping the status quo, there is little actual help.
First Solar an exception (Score:3)
Of course, Chinese dumping could reach a point that even innovative firms like First Solar will not be able to compete, but it does not look like we have reached that point yet. Meanwhile, price decreases should really start pushing the overall technology mainstream.
Visible hand of state corruption (Score:5, Insightful)
The sad thing is that everytime I bring up this massive scandal of enormeous proportions [in-other-news.com], I only get a shrug or something like "it's always been that way" as a response.
But in fact, Richard Nixon was impeached for far less and while certainly there was corruption before it seems to have gotten out of hand with the Bush/Obama bailouts.
Re:Visible hand of state corruption (Score:5, Insightful)
People have gotten used to the idea that wealthy corporations and individuals own the U.S. government (and plenty of other governments as well). They shrug it off because there is no viable alternative to turn to.
With both major political parties completely in the pockets of the rich and powerful, where is there to turn? Even those Occupy protestors couldn't answer that when they were asked. Their whole deluded movement seems predicated on the idea that if they make enough noise, suddenly all the politicians are going to turn away from their bread-and-butter and become honorable men and women. It's quite an epic pipe dream.
Re:Visible hand of state corruption (Score:5, Interesting)
Haliburton, which Cheney used to run, got 7 billion dollars in a no-bids contract for part of the Iraq reconstruction. When people complained, the government put the same contract up for bid and then manipulated the process so that only Haliburton could win. That's every bit as bad as the Solyndra scandal - and bank bailout bullshit at the end of Bush's term in office was every bit as ludicrous as bank bailout bullshit after Obama took over. They're all bad.
I take it as a given that anyone with enough resources to play in US politics at the national level is corrupt, in both major US political parties. I still vote according to the lesser of two evils philosophy - I view Obama as the pickpocket that still gets things right occasionally and his Republican opponents as a gang of devil worshipers conspiring to eviscerate any American who isn't hideously wealthy and sell his organs for a few pennies. Given that kind of choice, I'm going to go with the pickpocket every time.
Re:Visible hand of state corruption (Score:5, Informative)
The problem with this philosophy is that it can have the opposite effect and lead ironically to greater evil (*). Take for instance civil liberties. Obama has pushed forward every single civil liberty violating policy of the Bush administration. Yet because he is a democrat, there has been no push back at all. As a result, the radical usurpation of power by the Executive branch under Bush, has become the new normal under Obama.
As an example of the democrats' cynical nature, Marty Lederman once excoriated the Bush administration for using secret legal memos to justify due process free detention. Now that he is part of Obama's legal team, he is writing secret legal memos justifying due process free execution. The sad fact is, if there was a GOP president doing what Obama is doing, the democrats would pretend to care about civil liberties and at least put on a show of resistance. Instead, violating civil rights just became standard practice, a result far more evil than having the practice but also having some hope that opposition would change it.
http://www.salon.com/2011/10/09/the_awlaki_memo_and_marty_lederman/ [salon.com]
Vote for a third party candidate. No they won't win, but if enough people abandon the mono-party with the dem/GOP faces, it will inject issues into the discussion as dem/GOP politicians try to figure out how to pander to the disaffected. It certainly is not a waste of a vote to refuse to choose between A) being raped to death at night by the Democrats or B) being raped to death by day by the GOP. You can't win that so don't play.
(*) While Obama did not appear to be a "lesser evil" candidate in 08, he clearly will be in 2012 given his wholehearted embrace of neocon philosophy.
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As the grandparent post indicated, the Obama Administration is guilty of the same cronyism that the Bush Administration did. So they don't hold the high moral ground there. As you said, they've been every bit as bad as the Bush Administration on civil liberties. I am upset by that, and so are plenty of other Democrats, independents, and of course Republicans. They don't hold the moral high ground there either. High CAFE standards are an inherently flawed method fo
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The invisible hand of the free market has a second name, it's W-I-N-D P-O-W-E-R
Wind turbines are mechanical, sturdy looking, and people can easily grasp how they function. Solar, on the other hand is some sort of expensive, brittle black crystal stuff and - DON'T TOUCH IT YOU'LL BREAK IT - sort of fragile looking. And you want to put them outside in the weather with hail and stuff? Are you crazy? How does it work? You set it out in the sun and magical eco-elves fart out power or something.
Pe
Re:Invisible hand of the free market (Score:4, Insightful)
The plain fact is that wind and solar both could get us off fossil fuels, but they would require even more government subsidies than they already receive to do it. Convincing voters to support more government spending when the US government already spent most of 2011 deadlocked over spending is effectively impossible. I would love to see it happen, but it won't.
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Government subsidies decreased the costs to these companies so they could produce more product for lower price. However not all companies can get the same subsidies so they are forced to compete with some companies who have the ability to sell more for less, increase supply thus creating a situation where other companies need to sell at a loss as well there isn't that high of demand to allow these companies to invest into more efficient production m
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Don't worry, I'm sure the invisible hand of the free market will step in and all will be OK.
That's exactly what's happening.
The solar power industry's entirely dependent on subsidies. Solar power doesn't make any sense on an economic basis and the people who think solar power's the next step in power generation can't change that so they've thrown in with commercial interests, which are perfectly happy to take government money while it flows, in the hopes that those subsidies will "prime the pump".
But even government subsidies have an upper limit and that limit's clearly been reached. Now the "invi
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Re:The Market Has Spoken (Score:4, Interesting)
Re:The Market Has Spoken (Score:4, Informative)
Spain messed up the solar industry quite badly as I recall - they had such obscenely generous subsidies that they made even the most expensive solar panels cost-effective, because the gov't subsidised the purchase and set the prices for solar electricity sold to the power companies that installing solar panels was like printing money. They drove demand for panels through the roof, creating a false demand that the industry tried to meet, but once Spain understood the true cost of their solar initiatives they ended them, causing demand to plummet and the industry to suffer with excess capacity.
Prices don't go down when demand increases, prices go down when you have more product than buyers.
Re:The Market Has Spoken (Score:5, Insightful)
Well, it says that the projected increase is 8% for next year... wouldn't that be a sign of people wanting these thingamalings?
The company-killer is every player in the industry wearing very rose covered glasses thinking they individually will be the sole supplier for the entire markets growth.
The overall market is growing 10%? OK we'll borrow money to expand production by 10% of the world wide market. Later ... Oh sales only went up 10% yoy? Whoops, well I got my golden parachute, bye guys.
Assuming its not that bad, the finances kill them anyway. So, we need to expand production this year by 10% to keep up with demand and the other players. No problemo I'll ring up the bank... Bank says F-off because they make more money borrowing from the fed at 0% and issuing credit card debt at 29.99%. Well OK then we'll sell stock.... Whoops finance says forget that because the market is totally crooked and scheming so no one wants to buy a "real" investment, and due to SOX etc costs we actually cannot raise the money. Well then we'll self invest, raise our current prices so we clear enough additional profit to grow next year.. Whoops that killed our sales because the Chinese will govt finance at 0% and our higher prices killed our sales.
Fundamentally it comes down to
1) People are notoriously bad at making sensible investments during a strong growth phase
2) Corrupt and/or failing financial systems both here and abroad mean we can't get the dough to expand, no matter how much we want or how profitable it would be.
Re:The Market Has Spoken (Score:4, Interesting)
Because with Percent increase for a small market we should expect a large percentage increase. for a large market smaller percentage increase expected.
8% increase for solar panels isn't a good sign that people are really jumping on this technology. Solar Panels are a small market. 8% increase is probably more closely to people who wanted it but now are in an economic position where they can get it now. Get above 15% then you have some demand.
But for a larger business an 8% increase is a good number because there are so many customers right now that 8% means a lot of extra people are jumping in.
The Percent really summarizes data down to a level that really isn't that useful unless you see it in full context. And you are comparing Apples to Apples, Actually it would be comparing Granny Smiths with Granny Smiths to really make them useful.
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Re:The Market Has Spoken (Score:4, Interesting)
People *want* solar, they just can't *afford* it. I'm FAR from some environmental hippie, but even I looked into getting solar panels for my roof. In the end, it was going to cost me something like $25,000-$30,000 and save me about 50%-75% on my electric bill. At that rate it would take decades to pay itself off, and that's assuming that said panels will even last that long and require no maintenance (and I don't buy that for a SECOND). There was just no way in hell I could afford the upfront costs. Aside from a relatively wealthy few and a few clever do-it-yourselfers, solar is simply out of reach for the vast majority of the population.
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Sorry, but there is no fucking way a company is going to lease me solar panels at anywhere near what I would save in electricity each month with no upfront cost.
Let's use a best case scenario here. You've got a $25,000 upfront cost for installation. I average about $120 a month on my electric bill. Now, with that $25,000 upfront, let's say they give me a VERY generous interest rate on that loan of 10% (not likely, but this is best case scenario). That's $2,500 a year just on the INTEREST--not even factoring
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Except the Gov't didn't shovel money at the early car makers to build factories, then offer generous incentives to car buyers and then pay the drivers for actually using the cars. This is what the Gov't is doing with solar panel industry - paying companies to increase production, paying consumers to install them, then forcing utilities to buy the electricity they generate at above market costs.