Germany's Solar Industry Is Imploding
forbes.com
forbes.com
There is a two-way battle between the installation and service companies that use panels manufactured in the EU and other installation and service companies which use Chinese panels and equipment. The former claims potential job losses of 25,000 but the latter claim that over 70,000 jobs are also at risk in Germany and many thousands more across the EU if tariffs are imposed.
The media appear to be presenting this as a clear-cut issue of dumping to destroy European jobs but the reality is far from it. The BBC seems to be one of the better sources for dis-entangling the various points of view, http://www.bbc.co.uk/news/business-22766639, but the coverage does appear to favour the anti-dumping suits.
In other news, Germany reached 23.9GW of peak solar power output a few days back, around 40% of consumption http://cleantechnica.com/2013/07/07/breaking-germany-sets-so...
Here, fixed that for you. (Pilot projects on a large scale are useful to all of us. Someone has to finally do it.)
Let's build amazing green technology, invest and then profit some from adaption and then see the real goal come true when everyone starts to make it. It might kill some companies in the end, but there's so much more at stake here.
The amount of electricity actually produced is almost neglible (a meager 3.1% in 2011), whereas the consumer price has almost doubled since 2005, and is now one of the highest in the world.
Even if you assume that this giant experiment in planned economy would somehow lead to technological breakthroughs, making producing electricity via solar economically feasible in the long term, Germany would still have to recover the cost of 20+ years of subventions (which already amount to over 100 billion €, and that's only a fraction of the total sum which has been guaranteed by the EEG), while other countries with much better climatic conditions would be able to reap the majority of the profits.
So was it a jobs program or environmental? Politicians love to sell programs as one while really doing the other. Jobs programs tend to be vote buying schemes for the most part.
[1] http://www.erneuerbare-energien.de/fileadmin/Daten_EE/Dokume...
FWIW, PV contributed 4.7% of the electricity in 2012, wind contributed 7.7%. (Same source.)
In Germany, they prefer burning fossil fuels and therefore need less electricity during the winter. Should those burned fossil fuels be arbitrarily excluded when considering the total energy dependence of the country, considering they could be substituted with other energy sources?
[1] http://www.reuters.com/article/2012/02/14/europe-power-suppl...
The original poster had a much more accurate statement since transportation and industry is so weighted towards refined petroleum products and cannot/can not practically be substituted with electricity.
Also, which goal posts do you think were being moved exactly?
First he tried to minimize the accomplishment of having 40% of consumption coming from PVs by saying that it was from a very small percentage of the total energy consumption.
When it was pointed out that was over all types of consumption, he claimed that electricity could be a higher percentage of consumption if it were not from solar (presumably from nuclear plants).
That is where the goalposts were moved. He went from saying "Well, it's not really that much" to "Oh, it would be even higher if it weren't solar".
Let me point out a few things:
Germany is further north, and its population weighted climate is cooler. It has larger heating needs than France. Electricity is an godawful energy source for heating. Check out payback periods of solar hot water when substituting for NG hot water heaters vs electric water heaters. If Germany wanted to substitute low/no carbon heating they'd be better off with passive solar systems or geothermal - not solar PV or nuclear electricity. The very article he linked to was about France having to buy German electricity because they couldn't heat their own country w/ their huge nuclear fleet in a cold snap. The conclusion to be drawn there is that France's energy policy is flawed, not Germany's.
Also, heating methods aside, the metric is not honest. France has a smaller demand base than Germany (quick research: approximately 650TWh vs 525TWh in the mid 2000s) and Germany's economy is more industrial and energy intensive, which frequently doesn't permit electrical substitution.
Anyway, I don't have time to write more or edit this a bunch. But I hate to see poorly organized thought spreading anti-memes about clean energy.
I'm guessing you are one of many that don't read articles ry comment on?
China's companies are often state controlled. (if not outright owned, then the government controls a commanding stake) With an intense focus on keeping employment high, they are lothe to cut production in any way that would see to a lost of jobs.
So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price, (mind you, this lowers the profit they can obtain per-panel as well) but if they scale back to keep the demand higher, they'll need to cut factory shifts, which means letting go of workers (and dealing with the instability that follows)
The State's interest is in maintaining stability in society above all else, even in the face of sound economic sense. Unfortunately for all involved, this is not terribly sustainable. One of those shoes will drop eventually. Manufacturing in China is starting to suffer noticeably despite their best efforts to dress it up. Either the economy is allowed to liberalize and adjust normally (as it does in western countries), or it breaks down. Both scenarios would bring a critical eye to the Party.
When has this ever stopped anyone?
http://www.nytimes.com/2013/03/21/business/energy-environmen...
They only need to depress the prices until they kill off the non-Chinese competition, then they have a money earning business. After that, repeat the procedure for the next industry...
(This is the standard business model of monopolies. I believe a classic example are big bakery chains which enter an area and kills off the local small bakeries with low prices, then they raise the prices above the prices of the now-gone bakeries, to finance taking over the next area.)
In the mean time, it doesn't cost 700 quid to fly from Dublin to London anymore.
Conceptually sure, but in reality not at all. Airlines are extremely capital intensive. Everything aspect of their operation means truckloads of cash.
Airplanes cost a lot of money. Trained maintenance crews cost a lot of money. Hangars cost a lot of money. Parking at a major airport costs a lot of money. Forget flight attendants and amenities, just getting a barebones aircraft off the ground costs tens, if not hundreds of millions of dollars.
So there's a big caveat here: nobody enjoys flying Ryanair, it would be easy to blow them out of the market if you had a source for a few hundred million dollars of funding to get started.
I don't think most subsidies are good, but sometimes they could be needed if you want the future to look a certain way, and I don't think it's right to cut the subsidies of the solar industry after just a few short years, when the oil industry has been getting subsidies for almost a century, and keeps getting them (this goes for most countries).
Would it be illegal for these German companies to just buy up all the panels as they enter the market, to resell later? If the suggestion is that the panels are being sold at below-cost in order to crush competition, then it can't be sustainable.
The usual mumbling is then about it being a move to remove other's production capacity, and somehow in the future reap oversized profits. The technology moves fast enough to make that less likely, and reaping oversized profits means new entrants can come in to get regular profits so preventing the oversized profits.
Free markets are generally self correcting to match supply and demand. The people distorting them are usually the ones who end up worse off.
And, who knows, maybe one day they even offer significantly better standards than the western countries. If that happens, would you think that it would be ok for them to impose tariffs on western goods or stop importing from western countries until we somehow find a way to catch up?
Chinese industry must be gently pushed away from make-it-cheap-make-it-quick practices that are unsustainable in the long period, both from an industrial perspective (sooner or later there will be someone cheaper than you) and from an environmental one.
I suppose you could find examples of it in places that use a barter system that doesn't involve much, if any, government.
- free entry and exit: people can enter as suppliers or exit. Many markets are like this. Some aren't such as hospitals in most states in the US where you have to get a certificate of need, and it will only be granted if yours won't affect existing ones.
- mostly homogenous fungible products: you can do this for shoes, eggs and solar panels since they are substantially the same. This is significantly less true for nuclear submarines for the military because they are custom designs, and limited to builders with appropriate blessing and security clearances
- available information: the demand side can get information about the supplies on offer. You can do this for shoes and pretty much most things that have lots of reviews on Amazon. You can't for US healthcare since even pricing info isn't available in advance, nor is exactly what you are going to get.
No, not really, ever successful business tries to shift away from a ideological free market. That's the nature of the beast, after all in an ideological free market prices free fall to the lowest possible level.
And surely you should be aware from a empirical historical standpoint the statement is completely and utterly false.
You provide the reason in your second paragraph. The reason for dumping is to gain market share. Once a suitable amount of market share has been reached then prices will rise to profitability.
I don't believe the technology moves fast enough in this regard to resist the effects of dumping. Any new innovation that the Germans could introduce that would lower their costs enough that would allow them lower prices than the Chinese dumping would almost certainly be available to the Chinese. Who would then lower their prices yet again.
You do have the right idea about free markets correcting itself, in most cases. But a truly free market would result in all the German companies going out of business with the result being almost all panels coming from China. That would be bad for Germany but good for China. The reason to get in there to regulate that is because, under a truly free market, it would be possible for one region to totally decimate another region's economy due to numerous social and economic differences between the regions.
Think of locusts. They fly to a crop, eat everything, and fly away. Good for the locusts but bad for the farmer.
Also, I would replace "the sole purpose of grabbing government money" with "wouldn't happen if not for the subsidies". But then the spin would be different, eh?
Most people won't lift their asses, if not getting paid for it.
I want Germany to be green, if it only gets this way with money, I'm glad to spend it.
I'd be perfectly okay with that if you only spent yours, not mine. Since when has socialism and planned economy become acceptable on HN?
Perhaps we should ask since when is living in a bubble and declaring communitarian measures as failures acceptable in HN.
Starting with the obvious, the USSR and China were/are two of the largest experiments in socialism/planned economies. The USSR failed pretty spectacularly, while China's communistic policies are continually losing out to the spread of capitalism within it's own borders.
Meanwhile, in Europe, some of the more socialistic countries (Greece, for example) are failing economically while a strongly capitalistic (comparatively) Germany is continually having to bail them out.
I really don't see any argument that supports your claims, though I'd like to point out the answer is not pure socialism or pure capitalism. It's a happy medium, the million dollar question is exactly where that medium resides.
(Please don't respond with outliers like the resource rich Scandinavian countries that have small, extremely heterogenous populations)
The best the US has done in the past times is to reduce the amount of spending in social services and public infrastructure, creating the highest level of income inequality in the last few decades. Countries following the same policies are going the same way: a small cadre of extremely wealthy elites and a massive level of poverty elsewhere, with a minuscule middle class.
Further the Germans who have had democracy have voted for (a kind of) socialism and (a kind of) planned economy for the last 60 years, and they are in the top 5 healthiest economies of the world (although not largest), and their long term prospects with regards to manufacturing and exportation are much better than the US.
Are you a german citizen?
[1] https://en.wikipedia.org/wiki/Socialism
It appears it may be due to reduced government subsidies as well as cheap Chinese solar panels.
http://europe.autonews.com/article/20130325/ANE/130329940#ax...
Which products, exactly, are you referring to? Siemens is a huge company that spans transportation, energy, healthcare, etc. I know their sub-critical, superheated steam turbines are pretty cost-effective. What's your experience with Siemens?
Regarding turbines, I've only heard excellent things about the ones manufactured in the US, stay away from the brazilian ones though.
This bit isn't necessarily the case. Certainly reduced fossil fuel usage and pollution in Germany though.
It turned out to be true! It's easily verifiable, but just to start you off, here's one link. [1]
It isn't actually un-green to use lots of silver IMO, b/c solar cells will be around for a long time, but I think more people need to realize this fact b/c it means that certain solar dreams may not be financially possible.
For example, I once believed in covering the square meterage necessary to produce all electricity needs in the U.S. (and everywhere else for that matter) with PV panels. I couldn't understand why everyone was taking their sweet time. I figured it was a matter of waiting for the tech to stabilize... but now I realize we're limited by the cost of silver! (which has recently had a huge burst [2] )
p.s. Multiple companies are working on ways to reduce the silver in PV panels, including nanosilver and replacing it with copper, but the real issue is efficiency.
[1] http://www.caseyresearch.com/cdd/look-out-silver-here-comes-...
[2] http://silverprice.org/silver-price-history.html (see 5 and 10 year prices)
Are you sure about that? It's something I always wondered. The efficiency of today's solar panels is 15%-20%. According to a short google search, researchers have already shown panels with 44%. It seems certain that over time the efficiency of commercial panels is going up and prices are going down. If you have only limited space (e.g. your roof), doesn't it make economic sense to replace your old panels with more efficient and possibly also cheaper panels at some point?
Bloomberg News' Alex Webb reports that Siemens AG is getting out of the solar power industry, announcing plans to close its solar power unit after struggling to find a buyer following losses of at least $1 billion since 2011.
Source:
http://www.bloomberg.com/video/siemens-to-shutter-solar-unit...
But the biggest factor is that for a large number of people they will likely never be viable simply because they do not receive enough sunlight on a daily basis. The solutions for them is either importing the energy from the closest region that has ample sunlight or put the panels above the weather.
The problem is that Chinese companies like Suntech (1) get massive government grants to expand production, but when their massive overproduction swamps the market and prices crash, they still ended up losing money and had to default on their bonds. It's a debacle at both ends, Germany and China.
(1) http://articles.washingtonpost.com/2013-05-03/business/38997...
Conveniently, the article also states that Suntech is the largest global seller of PV modules, undermining arguments that it is some sort of special case (if it's the largest on the planet, it must be the largest in China...).
The difference in so called "standard of living", however, is very simple thing. For example, uneducated people who making roads in Sweden receiving around 3k euro salary, while exactly the same job in, say, China is just to get food and rent. Similarly, German working class enjoys very high wages, which makes any "fair" competition with Asian cheap labor impossible. Then big companies employs tricks, such as assigning taxes for Chinese solar panels in EU, just to protect inflated wages of its working class. Actually all this is the very basics of micro-economy, so nothing to discuss here.
Think about it: when you pay for power you pay not just for generation but for distribution as well. When you feed it back and your meter runs backwards the power company should be paying you only for generation (at a wholesale rate, so they can turn a profit).
In some countries they measure your power in both directions and give you a credit based how much you put back into the grid. This would be much lower than what you pay to buy power.
Just to be clear, I'm not agreeing as I feel that the State investing in the private economy can lead to good things if done responsibly. The problem is often that the people doing the investing have no idea of what they are investing in, which can lead to economic damages. Thankfully in these cases it just appears that we lost taxpayer dollars in those failings.
Personally I feel that many of those firms, not all mind you, were simple pump-and-dump schemes that had no intentions of succeeding at anything.
Why would be good to have tax money go where no private investor would? How sustainable is this in the long term? I thought this was obvious enough, apparently not.