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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.'"
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Prospects Darken For Solar Energy Companies

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  • by mangu ( 126918 ) on Wednesday December 28, 2011 @09:21AM (#38513966)

    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.

  • by BigTimOBrien ( 203674 ) on Wednesday December 28, 2011 @09:29AM (#38514012) Homepage
    Yesterday Iran threatened to stop the flow of oil in response to new sanctions being floated by the US. Who wants to predict how that would affect solar? Also, what effect is the explosion of shale oil operations in the US having on technologies like solar?
  • by Anonymous Coward on Wednesday December 28, 2011 @09:36AM (#38514054)

    I think he meant "fossil fuels are subsidized to produce", not necessarily the end product.

  • by wbr1 ( 2538558 ) on Wednesday December 28, 2011 @09:48AM (#38514134)

    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. []
    Coal power has higher costs than we see. []

    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.

  • by gadget junkie ( 618542 ) <> on Wednesday December 28, 2011 @09:51AM (#38514162) Journal
    the subject seems to imply that there's a panel manufacturing problem. In reality, there's a "new economic policy" [] problem: practically all the demand is government issued, and the private sector has been sucked up in the maelstrom. As in the original plan, I expect a full nationalization will ensue, on economic grounds

    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 [] 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 [] 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%.
  • by ShnowDoggie ( 858806 ) on Wednesday December 28, 2011 @10:06AM (#38514290)
    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.
  • by rmstar ( 114746 ) on Wednesday December 28, 2011 @10:16AM (#38514396)

    Get your facts straight. Fossil fuels are never subsidized, but instead heavily taxed by the governments.

    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.

  • by Anonymous Coward on Wednesday December 28, 2011 @10:17AM (#38514406)

    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.

  • by kenh ( 9056 ) on Wednesday December 28, 2011 @10:20AM (#38514434) Homepage Journal

    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.

  • by DemoLiter3 ( 704469 ) on Wednesday December 28, 2011 @10:33AM (#38514546) Homepage
    Examples here in Germany:
    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.
  • by copponex ( 13876 ) on Wednesday December 28, 2011 @10:40AM (#38514602) Homepage

    Governments last year gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices known as feed-in tariffs and alternative energy credits, the London-based research group said today in a statement. That compares with the $557 billion that the International Energy Agency last month said was spent to subsidize fossil fuels in 2008.

    Source. []

    You were saying?

  • by Tolvor ( 579446 ) on Wednesday December 28, 2011 @10:41AM (#38514626)

    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 require a lot more panels. This also does not account for the need of storage batteries, energy transmission loss, and power loss to material degradation (dusty solar panels), life-cycle (panels last about 20 years), or the fact that during the night there will be no energy production.

    I go over these figures every few years and it just does not appear that this is a viable solution. It would be *nice* to use solar panels but if it is not realistic the solar panel industry will never thrive. Where would we fit all of these solar panels, and where would we find the money?

  • by LWATCDR ( 28044 ) on Wednesday December 28, 2011 @11:20AM (#38515062) Homepage Journal

    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.

  • by rubeng ( 1263328 ) on Wednesday December 28, 2011 @11:20AM (#38515064) Journal

    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%

  • by Idou ( 572394 ) on Wednesday December 28, 2011 @11:31AM (#38515188) Journal
    Sure, but no different from nuclear, fossil fuel production, etc . . . How can solar ever move to mainstream with out at least receiving similar subsidizes to the more established forms of electricity production industries?

    How about removing the subsidies from the other industries first?
  • by alispguru ( 72689 ) <> on Wednesday December 28, 2011 @11:59AM (#38515546) Journal

    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 []. That source puts fossil fuel subsidies at 0.8 cents/kwh and "renewables" (non-nuclear, non-hydropower) at 5 cents/kwh.

  • by Curunir_wolf ( 588405 ) on Wednesday December 28, 2011 @12:00PM (#38515564) Homepage Journal
    After some more research, I actually found some a little closer to the $1 per watt mark. CivicSolar [] has large panels running around $1.30 per watt. They have laminates, too, but for about twice the cost.
  • by anagama ( 611277 ) <> on Wednesday December 28, 2011 @12:00PM (#38515578) Homepage

    I still vote according to the lesser of two evils philosophy

    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. []

    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.

I've finally learned what "upward compatible" means. It means we get to keep all our old mistakes. -- Dennie van Tassel