As China’s photovoltaics makers continue to lay waste to the nascent U.S. and European industries, we need to be clear about an economic fundamental. According to conventional wisdom, the progress of solar energy has been vastly accelerated by the availablity of low-cost Chinese PV modules. But that assumes prices will remain rock-bottom and progress will continue. In fact, the general presumption is that China is "dumping" PV on world markets--that is to say, selling them below cost. If that's so, we won't know what the real world price of PV is until China sells PV at or above real production costs and a lot of other things get sorted out.
At a New York Times energy conference last week China specialist Kevin Juanjun Tu of the Carnegie Endlowment for International Peace suggested that the major countries need to get together and negotiate what kinds of solar subsidies are legitimate and what is unacceptable. That is a good idea, but it won't be easy to act on. Only the specter of all-out trade war in renewables will spur the major players to action.
Meanwhile, the solar crunch continues to claim victims. The week before last, Brightsource Energy, a U.S. startup developing large-scale thermal solar plants, had to cancel a planned initial public offering at the last minute. The absence of investor confidence reflected some concerns about Brightsource's particular kinds of projects like its 392-MW Ivanpah project in California but also a general unease about where solar is headed, given controversy over subsidies worldwide and the impact in the United States of ultra-low natural gas prices. Earth2Tech/GigaOm, the tech blogging site, has compiled a chart detailing "the death spiral of solar bankruptcies."
An encouraging development, Earth2Tech reports independently, is Japan's decision to aggressively promote solar projects. Post-Fukushima, facing a drastic loss of nuclear generation, Japan adopted a law requiring utilities to purchase renewable energy at a premium. It is expected to give Japan's big solar manufacturers, like Panasonic, Sharp and Solar Frontier (part of Showa Shell), a boost.
