The news on Wednesday that solar power company Solyndra declared bankruptcy might seem to the casual eye to be one more nail in the coffin of the U.S. solar power industry.
Europe and China might be ahead of the United States in trying to harness the energy of the sun to meet the world’s energy needs, but U.S. companies are still in the mix.
The New York Times reported Thursday that U.S. failures in the marketplace are boosting an already successful Chinese solar energy sector that, while technologically behind Europe, South America and Japan, has the benefit of heavy government investment in the form of cheap loans, tax breaks, cheap or free property and massive economies of scale.
Europe, too, is actively pursuing solar, with Italy having recently instituted a feed-in tariff that provides incentives for products that are at least 60% European manufactured.
That incentive not only boosts European companies but is providing a boost to U.S. companies with manufacturing facilities in Europe. Arizona-based First Solar has been producing thin-film modules in Frankfurt, Germany, since 2007 and intends to double manufacturing capacity.
And the United States solar power industry actually boasts a trade surplus with China. According to GTM Research and the Solar Energy Industries Association (SEIA), in a report released at the end of August, the surplus amounted to $247 million, thanks to solar exports of $1.9 billion. ThinkProgress reported on that and also on the size of the government subsidies China provides to its solar industry; a chart on the site shows that U.S. government investment in Solyndra was dwarfed by Chinese investment in any one of its companies.
In a self-perpetuating cycle, China’s cheap products put even more pressure on remaining companies to lower their prices. Shayle Kann, a managing director of solar power studies at GTM Research, a renewable energy market analysis firm based in Boston, said in the report that solar equipment pricing is set by the Chinese “and everyone else prices at a premium or discount to them.”