Solar Power

China Is Winning the Race to Lose Billions on Solar Power

Cower, America, and consider China's $17.5 billion solar manufacturing debt. How can we compete with that?

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Race to the bottom!

America's failed government-subsidized ventures into solar panel manufacturing have been blamed on that massive Chinese industrial juggernaut, flooding the market with cheaper goods and making it impossible for us to compete. (And not because of poor public investment decisions and lack of accountability due to crony capitalism, no sir!)

So let's turn to Caijing Magazine, reporting directly from China on all matters business, to tell us how well the nation is curbstomping our struggling green energy capitalists here in the free world:

China's top ten photovoltaic makers have accumulated a combined debt of 17.5 billion U.S. dollars so far, leading the whole industry to the brink of bankruptcy, data from U.S. investment agency Maxim Group showed.

Goodness. That's 35 Solyndras!  

LDK Solar, the world's second-largest maker of solar wafers, and Suntech Power, the world's largest solar panels producer, are the mostly likely to be headed for bankruptcy, Maxim noted.

LDK reported a net profit loss of 1.08 billion yuan in the first half of this year, with a total liability of 26.7 billion yuan, about 88 percent of its total assets. 2.42 billion yuan of debts will come due in 2013, compared with a cash pile of only 830 million yuan.

With its debt-to-equity ratio at 7.4, the Jiangxi-based LDK has already been in insolvency based on corporate accounting standards in the Europe and the United States, according to Maxim. A bankruptcy filing or restructuring could be needed for LDK, it added.

The White House likes to respond to Solyndra's bankruptcy rather dismissively. It's one of the risks of venture capitalism investment. Sometimes the risk doesn't work out. But we must invest! We must not fall behind Europe and China! But if China can't make it work with its cheap labor, Solyndra is far from an anomaly (as we're already learning from our parade of misbegotten solar failures).

So is the United States learning its lesson? This week the Department of Defense announced it would open up 13 million acres of public land for renewable energy development. How much of that will require government subsidies of manufacturers to actually happen? Or will the government listen to Americans begging them to stop it? (Ha ha, fat chance)

NEXT: Romney Campaign: What, Us Worry About Polls?

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  1. But progressives keep telling me that only governmental forces are capable of keeping the world powered and inhabitable. It’s obvious to me that Solyndra’s failure was due to Bain Capital sending in its KKKapitalism Lynch Mob Teabagger Squad (KLMTS) to raid its coffers, like Joker did in TDK.

    Silly libertards misleading people!1!11

    1. 8/10, points deducted for not working in the Koch Brothers somehow.

      1. KKKapitalism

        The two extra K’s are for each Koch Bros.

        so, 9/10?

      2. I also forgot transfats. Shit. I’ll try harder next time.

        1. I blame Bush.

          1. Yeah, he forgot that one, too.

      3. Richard Mellon Scaife is in the throes of depression at not being the Left’s bogeyman anymore.

  2. “That’ll be four and a half Solyndras, here’s your loaf of bread.”

    1. (That’s 35 Solyndras!)

      1. Someone already made a fantasy game based on the Obama administration? Is it anything like Magic: The Gathering?

        1. Is it anything like Magic: The Gathering?

          More like E.T. for the 2600.

          1. Winner!

  3. If the Chinese can sucker the dumbass Euros to pay for their solar panels, (a not entirely unlikely scenario) they could still see a positive return.

    1. To bad we’ll have to spot the Euros some cash to buy the panels.

      1. Which they Chinese will then have to spot us. Chinese still lose.

        1. Which they Chinese will then have to spot us. Chinese still lose

          D’oh, I can’t keep track of the whole loan-chain in my head.

          1. The lynch pin is a loan shark in a Sao Paulo getto. If he sleeps late or lets some crack dealer have an extra day to pay, the whole fucking house of cards comes down.

            So, Joao! Wake up! Break some legs! The Planetary Ponzi scheme demands it!

            1. By God, I laughed unto tears reading that, B P – well done.

          2. It’s loans all the way down.

        1. Ew.

          1. Yeah, BP, that sounds like something I’d consult a doctor about.

  4. The White House likes to respond to Solyndra’s bankruptcy most criticisms rather dismissively.

    ftfy.

    1. The White House likes to respond to Solyndra’s bankruptcy most criticisms rather dismissively.

      ftfm.

  5. No worries, their margins are negative, but they’ll make it up by selling more!

    1. “Brett, how many straws does it take to make a Superstraw? And how much does each straw cost?”

      “It’s OK, they’ve been selling really well….Oh….”

    2. Economies of scale and what-all…

      ::Waves hands dismissively::

  6. The White House likes to respond to Solyndra’s bankruptcy rather dismissively. It’s one of the risks of venture capitalism investment.

    Um, if Obama was going to be consistent to his criticisms of Romny at Bain, shouldn’t have have given Solyndra MORE money to avoid letting it go bankrupt?

    1. Emperor Obamus Barackus Husseinus Augustus Americanus Caesar should have sold Detroit to Canada, or something, which would have provided him the funds necessary to… um, buy a six-pack of Coors Light, I guess. Scratch that. Detroit ain’t worth much.

      1. I’m sure you can find plenty of six-packs of Coors light in Detroit. The question is how much it’ll cost you to get one out.

        Perfect example of sunk costs.

    2. Just wait until some ex-Solyndra codger’s old lady kicks the bucket.

      1. Romney needs to make a commercial featuring a former Solyndra employee complaining about how some asshole wasted his life by training him to build useless products.

        1. Actually, Romney should make a commercial featuring border patrol agents complaining how the D’oh!bama justice department is arming the mexican drug cartels

    3. How many of those people Solyndra let go lost their health insurance?

      1. Yes, more people who didn’t get to keep their current plan!

      2. But they now have ObamaCare – they will live forever!

  7. There is a wasting money on solar panels gap. Mr. President, we must not allow a wasting money on solar panels gap!

    1. Damn you for thinking of that first! I can see George C. Scott chomping gum and sweating and saying just that!

  8. Solar panels cost more than they save in energy. Until someone comes up with 1) a cheaper way to manufacture them and/or 2) a much more efficient panel that produces more juice, these companies will continue to fail. There’s a very limited market for off-grid solar.

    1. I think algae-based biodiesel will be the only efficient “solar panel” developed this century.

      1. I’ve been looking at it for 3 years now. Like started grad school to do research on it looking at it, and you just can’t get away from the fact that the unrendered triglycerides in even the best algaes are about 0.5 g/L water. Figure 20% of that is the glycerin (not diesel) and you get 0.4g of diesel per liter of water. Now a gallon of diesel weighs about 3.4 kg so you need 2125 gallons of water per gallon of diesel per growth cycle to make 1 gallon of diesel.

        To put it in simpler terms. If the average car uses 10 gallons of diesel a week and your algae can be harvested once a week (a bit of a stretch) than you need 21250 gallons of water not more than 4″ deep per car growing algae. I’ve tried every which way to design a system that would fit on a 10’x10′ slab that would produce 10 gallons of diesel a week and it ain’t happening. I can say pretty certainly that algae biodiesel will never be a distributed product. It will have to be factory farmed.

        1. glycerin is also useful, though, I get the idea that there’s already a surplus of it from existing industry.

          The reason I think algal fuel will have an edge over any other solar tech is that it could be farmed in the ocean, where there’s plenty of sunny surface area that’s not useful for anything else.

          Then again, if deserts can get NIMBY’d, so will the ocean.

          As far as the “getting off the grid” dream goes, my idea is to switch “the grid” to natural gas distribution, with combined-heat-power systems in every home. Natural gas distribution is a reliable, mature technology, free of many of the challenges associated with electrical distribution.

          1. could be farmed in the ocean

            Clarification: not farmed IN the ocean, but rather in expertly designed growth chambers that float ON the ocean. Use the local seawater (after appropriate sterilization), import fertilizer if needed (if you setup in rich waters you might not even need nutrient supplementation and it could improve the quality of polluted/eutrophic waters).

            1. These are all true. As I said, it can’t be distributed to a rooftop, suburban household level, and it takes a LOT more space than people are led to believe when they hear it is “more efficient than traditional plants”.

              1. The main problem with solar power in general is insolation. 400 W/m2 at best. Once you take away cloudy days and normal inefficiencies you end up with maybe, on average, 50 W/m2 at best. And that’s just during the day. So, best case scenario, it takes a couple square meters of space to power a light bulb.

                And that’s only if the light bulb is sitting right next to your solar panel. If you want to pump those electrons into the city, 200 km away, then you need even more area.

          2. Why don’t we just convince everyone that nuclear power really isn’t that dangerous and then build a strong base of nuclear plants with nat gas as backup?

        2. Don’t feel too bad. I had a similar miscalculation recently. I started with corn from my wort grain for the latest batch, and it occurred to me, why don’t we roast that corn first and see how that enhances the flavor. Why no one told me about this stuff called popcorn I would like to know.

          1. Why no one told me about this stuff called popcorn I would like to know.

            Why? For teh luls, duh.

            1. I hope to Cthulhu that no one was recording behind my back.

            2. I’m trying a salvage. Crushed the grains and added pectin to convert the hard starches to murky sugars. It may turn out to be an interesting batch even with the extra hopped stupidity.

        3. This is where you bring in the genetically engineered super-algae.

          1. That is the super-algae. We need more genes apparently.

            1. Could you put in more copies of the same gene? Would that work?

              1. I don’t think you understand how genes work together. For that matter, neither do I. Still, I’m pretty sure it’s more complicated than just inserting more genes.

    2. Exactly. Government can subsidize them, but the demand is still not there so you’ll never make up the cost of production. Right now you could buy a solar panel made in China for a good price becauuse demand is so low, but that deflates the economic jingoism that Obama and his merry band of plunderers push.

      1. So if they can just find a way to boost demand, then the prices will come up.

        Hmm, let’s see, how to raise demand for a product… Oh, I know! We’ll pass a law requireing people to purchase solar panels and install them on their roofs! We’ll offer subsidies through a government operated solar panel exchange for those who can’t afford it, and anyone who doesn’t buy a certain minimum amount of solar panels for their roofs will be subject to a penaltax. Problem solved.

        1. Exactly. And low-power. Our Dept of Transportation is using them on highway signs now. I don’t know the specifics of the ROI, but I’d be willing to bet it’s not too bad.

          1. Plus, you have to admit it would be difficult to run an electric cable to Curiousity.

            1. Curiosity is nuclear.

              1. Nope. It uses an RTG, which is not the same thing as a nuclear reactor.

                1. Cool! Though I really wish Curiosity’s engineers had used an Illudium Q-36 explosive space modulator.

                  1. Do you want to give the Martians the ability to blow up the Earth?

                2. Curiosity is nuclear.

                  Nope. It uses an RTG, which is not the same thing as a nuclear reactor.

                  You’re arguing against a claim that Mad Scientist didn’t make. He just said that it’s “nuclear”, not that it’s a Fission-Based Nuclear Reactor. A RADIOISOTOPE thermal generator is still nuclear in principle, since nuclear reactions (radioactive decay) are the source of the thermal output.

                  1. The best kind of correct!

                  2. True, but there are a lot of people who do mean “fission based nuclear reactor” when they say “nuclear”. I had no way of knowing whether Mad Scientist was one of those people or not. I suppose I could have asked and waited for a response, but I figured there was no harm in going ahead and clarifying. If he knew it was an RTG great, then no harm no foul.

                    I’m also a little sensitive to this issue ever since the flap over Cassini back in the late 90’s. A lot of the eco-mentalists who protested that launch didn’t seem to understand the difference at all.

                    1. True, but there are a lot of people who do mean “fission based nuclear reactor” when they say “nuclear”.

                      It’s my impression that those people tend to pronounce it “newquelar.”

                    2. True, but there are a lot of people who do mean “fission based nuclear reactor” when they say “nuclear”.

                      I would expect a “mad scientist” to know the difference.

              2. ZOMG! Mars is going to be polluted for 100 Billion years by that nuclear power plant and all the Martians will DIE.

        2. Oops…that was to Aresen’s post below.

        3. Why do that when you can resort to the traditional method … impose tarriffs on foreign produced windmills and solar panels. (Note. Obama has actually done this).

          I will be watching with amusement to see how this improves the market for alternative energy in the US.

      2. It’s not just the cost of solar panels you have to account for. The way average businesses and homes are designed the energy from a solar panel cannot be used by they without first being passed through an inverter to convert the energy from DC to AC. The average inverter for a typical US home costs between $3,500 and $6,000.

    3. There are some applications where a solar panel is cost-effective, despite the relative inefficiency. For example, powering a piece of equipment in a remote location where it is impossible to build a power line (or cheaper than doing so.)

      Other than that, Solar power is all about Green Hip.

    4. And just wait until the Greens start suing to keep large-scale solar generation facilities from cropping up. Then you’ll see the a blind alley we’ve been led into.

  9. The White House likes to respond to Solyndra’s bankruptcy rather dismissively. It’s one of the risks of venture capitalism investment. Sometimes the risk doesn’t work out.

    Except in venture capitalism, the capitalist is risking his or her own money. The idea of anyone in the White House calling Solyndra-type deals “risk” is laughable.

    1. Well, it’s politically risky.

      1. Yeah, how dare you not appreciate the Campaigner-in-Chief’s risky decision to invest tax payer money in order to please his donors. He needs that money, damnit!

      2. If by “risky” you mean “there’s a chance my campaign contributors might not like free money”.

        1. No. It is politically risky because the people who had to cough up the money to be given to your campaign contributors might not like the idea.

          However, as we all know, it’s ‘good intentions’ that count, not actual results.

  10. Why in the wide, wide world of sports does the DoD have 13 millions acres of land? Are they planning on GMO troops?

    1. That’s classified.

      *put a drone on this one*

    2. Special breed of high-ethanol GMO corn?

    3. Alien sequestration.

  11. It’s just taxpayer dollars getting wasted. When we run out, we’ll just raise taxes on the EVUL RICH and get more. Or we’ll just fire up the printing presses and print more. Easy peasy.

    THIS IS WHAT PROGRESSIVES ACTUALLY THINK.

    1. I really wish the stupid party would figure this out: every time the right gives away taxpayer cash to some politically connected crony, the evil party feels fucking entitled to do the same for one of their cronies, just to make things even.

      1. Which party is the evil party? Because that describes both of them. You know, TEAM BE RULED.

        1. I can’t remember. Both TEAMS are interchangeably evil and stupid whenever it’s expedient.

          1. You know, when Dark Helmet said “evil will always triumph because good is dumb”, I think he had it wrong. I think it’s “evil will always triumph because it is dumb” is more accurate.

            1. I think Dark Helmet had it right. Re-cajigger it this way: Government will always triumph over the governed because the governed are dumb.

              1. So, Mad Scientist; I see your Schwartz is as big as mine. Now let’s see how you handle it.

                1. I am your father’s brother’s nephew’s cousin’s former roomate!

                  1. So what does that make us?

                    1. Absolutely nothing! Which is what you are about to become!

                    2. Say goodbye to your two best friends, and I don’t mean your pals in the Winnebago.

      2. They are not so much stupid as they are into self preservation. As in, to admit libertarians are right about one single thing means the whole show is a farce, and that one thing then applies to their entire MO.

  12. Don’t worry China, our current administration will buy your useless technology, with money that we borrow from you. It’s a win win for you.

  13. It is times like this I get really cynical and think the whole green energy movement is a CIA plot to bankrupt and cripple other nations. And then I remember what an actual CIA plot looks like.

    1. I dunno…it looks like it will hurt us quite badly too – that sounds CIAish.

  14. Man, it’s a twofer today:

    But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.

    See? It’s working!

  15. And just wait until the Greens start suing to keep large-scale solar generation facilities from cropping up.

    I should put eight or ten acres of solar panels on my property, just for yucks. The shrieking hysteria from my Californicator neighbors would be awesome.

  16. Today, in the “Pour-Money-Down-Rathole” competition, China took an early lead! But wait! The US Blue Team is trying to come from behind!
    Yes, folks, the US Blue Team is determined not to let China walk away with all the medals in this important event!

    1. We can’t have a money hole gap!

      1. That’s what I inartfully said.

        1. I’ll admit it. I stole that comment from you, and combined it with this.

      2. Nor can we have a glory hole gap.

    2. China came from a long family tradition of rat hole champions that had fallen on hard times. Oppressed for generations by their foreign occupiers they struggled hard to overcome decades of Western indoctrination, but after years of training, they learned to overcome adversity and become rat-hole champions once again. Today China struggles to win the rat-hole Gold in order to feed it’s starving mother who has been diagnosed with breast cancer, and it’s 17 children, all of whom have been diagnosed with scurvy.

      1. God darnit, Ms. Meade, you use your tongue prettier than a twenty dollar whore.

        /Slim Pickens

        But seriously Hazel, you write some of the most interesting, descriptive, and sometimes depressing comments on H+R. I always enjoy them.

  17. “With its debt-to-equity ratio at 7.4, the Jiangxi-based LDK has already been in insolvency based on corporate accounting standards in the Europe and the United States, according to Maxim. A bankruptcy filing or restructuring could be needed for LDK, it added.”

    Don’t tell Thomas Friedman.

    On second thought go ahead and tell him.

    I doubt the truth could penetrate his thick skull anyway.

    1. Another takeaway; with the exception of (maybe) Baidu, do not invest in Chinese equities. GAAP don’t mean shit to these companies.

  18. I constructed my own solar panels earlier this summer and as far as i’m concerned they are the best thing since sliced bread! helping me save money already and good for the environment too!

    1. Bwa ha ha ha ha ha ha ha!

  19. FYI Scott Lincicome covered this issue two days ago:

    http://lincicome.blogspot.com/…..inese.html

  20. I have a feeling China will always come out on top!

    http://www.in-privacy.tk

    1. I have a feeling China will fly up it’s own ass.

  21. Why is it that there were solar panel manufacturers in the US that were actually succeeding and why did the leave? Well, if you can manage to pay the higher labor costs, the government will do everything it can to discourage your survival. OSHA, DEP, EPA, NLRB and the rest of the alphabet are not there to help you survive – they are there to discourage you and if they do their job right, make you say “Who needs this, let’s outsource”. And in the future, The non-affordable Obamacare act will help convince you to quit US manufacturing.

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