Friday, September 14, 2012

Solar Power Industry Is a Bust Worldwide

Everyone wants to blame China for the collapse of the global solar industry, but the fact is: big commercial-scale solar is an incredibly stupid, crap-headed idea. More from Peter Glover:
The global solar power industry is in crisis. The industry blames widespread national subsidy cuts and over productivity; China, in particular, being widely vilified on the second count. However, the real cause of the solar industry’s malaise runs deeper, rooted, as it is, in the inescapable fact that, in terms of current technology, commercial scale solar energy remains a non-viable proposition.

Wherever you look the solar power industry is mired in financial problems, all of which lead back to the (life support) of public subsidy, the impact of market-skewing regulations (creating the appearance of commercial viability) and, ultimately, protectionist trade wars (US and Europe v China). In economic good-times, three natural consequences of government-sponsored global industries that can be obfuscated by a network of feed-in tariffs, levies and other ‘green’ taxes to pay for them. But in leaner economic climes, the real cost of ‘free’ energy becomes all too clear.

...China itself is suffering from precisely the same market problems as all its competitors. While Beijing will attempt to stave off decline through government stimulus, it is only a question of time before the loss of European and US markets for cheap Chinese goods, including solar panels, causes an economic downturn there, too.

...China’s over production only came about because Beijing’s economic stimulus for its solar industry led to explosive growth and, ultimately, unfettered over production. Given enormous government subsidies there was literally no incentive to slow production down. In the game of who could sustain massive public subsidy longest, cash-rich China clearly won. But the fact is that the sun looks to be setting on China’s solar industry, too. Beijing has also become aware it cannot go on subsidizing its solar and renewable industries.

...Taken as a whole, government incentive schemes around the world have created a glut of suppliers that the capitalist free market would never have sanctioned. The eclipse of Europe’s solar industry is in truth down to simple economic realities hitting home as commercial scale solar power is simply too expensive a proposition to attract serious private sector investment and end massive public subsidies.

In January, Spain’s economic crisis forced it to cut its renewable subsidy regime entirely. In April, a near-bankrupt Italian government estimated that its subsidy regime left it facing a $60 billion bill to photovoltaic generators over the next 20 years. In The Great British Solar Scam I wrote about how the UK’s bid to cuts its ludicrously generous solar subsidy regime saw it prevented from making subsidy cuts by a European court after the UK solar industry inevitably claimed widespread bankruptcies would result(1).

What marks out both the entire renewable energy sector for economic decline above all else is the fact that it is effectively an expensive government-sponsored enterprise, not a child of the free and democratic marketplace. Consider again the elements colluding to produce the current crisis: the lifeline of public subsidy, energy levies and taxes and market-skewing regulation dove-tailing with incentivized over-capacity, protectionism and, ultimately, trade wars. All marks of an industry kept afloat by ideological fiat and not free market capitalism geared to meeting actual market need. _Peter Glover

All too true.

In fact, Al Fin energy analysts frequently state that even if photovoltaic were 100% efficient and given away free, PV would still not be viable for large scale grid power. Readers who do not understand how that could be very close to the case probably do not understand how the power industry works.

The attempt to match contemporary high voltage AC power grids with intermittent low voltage DC power that requires vast amounts of landscape for minimal amounts of power, could only be a dystopian fantasy dreamed up by the most impractical of persons. Germany's attempts to base its industry on solar power are particularly laughable.

Fortunately for North America, it has other options which have not yet been completely shut off by the incompetent green buffoons within the various governments. It is up to the more knowledgeable to make sure that such a suicidal energy shutdown in N. America never happens.

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