BY JACK DINI – Workers in Germany’s once booming solar energy industry face a shakeout of major proportions following declines in the price of solar panels over the past year. Cuts in subsidies for solar energy, weaker demand for panels and fierce competition from cheaper Asian rivals are eating into what was once the world’s biggest hub for the production of solar cells, taking the shine off an industry that was effectively born in Germany. (1)

Two German companies, Solar Millennium AG and Solar SE, have filed for bankruptcy or insolvency and others, including Q-Cells SE and Solarworld AG, are reeling from rising foreign competition just as demand ebbs in Germany, the largest photovoltaic market last year. (2)

Subsidies, or so-called feed-in tariffs, through which operators of solar panels receive a guaranteed price for the electricity they generate, made Germany the world’s largest solar market and had created 150,000 jobs by 2010. But over the past two years, Germany has sharply reduced tariffs, and a recent proposal to limit subsidies for new solar installations may seal the industry’s fate. (1) It’s been reported that every job in the Germany solar sector cost 250,000 euros ($318,000) to electricity consumers. (3)

Ironically, a decision by the German government in 2010 to phase out nuclear energy has done little to reignite the sector. Germany, one of the countries that constantly preaches the global warming doctrine and insists the rest of the world do as it says, will increase its reliance on coal and gas. It plans to build 27 coal-fired electrical generating plants by 2020. (4)

In the global market at least seven solar panel manufacturers have filed for bankruptcy or insolvency in recent times. (5) Solar power hit an all-time high in the United States but it is now plagued by over capacity, declining prices, dwindling subsidies, and bankrupt companies. That is because its product is uneconomical without massive subsidies, needs the sun to shine in order to produce power, must be backed-up with other power sources for reliability, and has steep competition from China where the labor rates are low and solar manufacturers are subsidized. Led by China, global production of solar panels tripled in the last three years. (3)

All this makes a strong case for questioning the viability of the ‘green job’ strategy for the solar sector.

 

References

  1. Sarah Marsh and Christopher  Steitz, “German solar firms go from boom to bust,” Reuters, December 13, 2011
  2. Stefan Nicola, “German solar industry faces bankruptcy,” Bloomberg, December 14, 2011
  3. Aurelia End, “German job boom in renewable energy questioned,” AFP, January 8, 2012
  4. Paul Driessen, “Leader of none,”  http://www.cfact.org/a/1584/Leader-of-none, September 8, 2009
  5. Institute of Energy Research, The status of renewable electricity mandates,” January 2011

 

 

 

 

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