INDUSTRY I ISSUES
concern regarding the long and short term differences between industry and the companies that make them up.
Of course the trade issue is just a small part of a much bigger dispute as China begins to challenge the USA for prime status in the global market place and only serves as a background that enables local and insular issues to be raised to a higher platform of concern. That process will continue as it will and is not the crux of the solar problem which is a divide between long term goals and short term desires.
In the beginning there was light Solar is a much older technology than the current boom and the first solar cell was developed in the 1950s after a chance discovery whilst developing the first transistor in the 1940s. There has been numerous attempts to kick start the solar industry, probably the most famous in 1979 when the then USA President Jimmy Carter had 32 solar thermal panels installed on the roof of the White House. This initial burst of interest and
subsidy from the government led to a flurry of activity which was quickly dampened by the subsequent oil price war of the 1970s which saw oil prices plummet to below the solar costs. Investment
continued in the solar field until 1986 when President Reagan began to cut costs from many
programmes to fund the growing military direction the government pursued. Reagan also had the panels removed from the White House the same year. Carter’s hopes were a future society less reliant on energy supplied from a volatile market. The environmental argument was not as evident so the fiscal argument was the rationale for the Reagan change of direction.
Fortunately for the global industry Germany and Japan continued to support their local solar concerns with subsidies and support allowing an environment
where research could continue. This has to led to those two countries, along with a few other important contributors such as Australia and Israel, providing much of the innovation and opportunity for the global market for the next couple of decades. Both countries have had to face internal squabbling about the merits of developing solar power versus the financial realities of its comparative cost. Japan slowed its renewable energy commitments with a bigger financial crisis but has resumed the renewable race in recent years. Germany continued along its path and has remained the dominant player in the industry but that is about to change.
Since the turn of the century environmental issues, especially global warming, have had an ever increasing impact on both government and financial institutional policy making. The key area of concern was energy production and the impact of the waste emissions on climate leading to a renewed interest in renewable energy.
A global glut With increased pressure to deal with energy issues governments began to look at the countries developing the technology. It was no surprise that Germany’s neighbours were the first to develop a state sponsored subsidy programme to kick start the local industry. Italy and Spain were early adopters and suddenly Europe was leading the way in developing a new and sustainable solar market. A cry was raised for the industry to forge ahead to grid parity, the point when solar becomes cost equivalent to traditional energy production methods, enabling a truly sustainable industry without the need the need for subsidy. Until then the long time research and development cost requirements would be possible through the support.
This level of subsidy was unusual as the industry was still forging ahead with a number of competing technologies. With the main focus on silicon based and thin film technologies, all sectors received financial assistance with a long term goal in mind. When the USA made renewables a priority and the money was planned there was uncertainty as to which technologies would prevail and the USA chose to heavily back thin film based on high silicon prices at the time and an assumption the Chinese would not be able to make enough silicon product of a high enough quality. The USA turned out to have backed the wrong horse as prices plummeted and the Chinese surprised everyone with the speed they were able to ramp up new product. Too much product as we are seeing now. To the external world the solar industry is one big group so recent thin film failings have reflected poorly on the whole industry.
The spread of subsidised markets made them a commonplace driver for each new market instigating explosive growth around the globe driving prices down and enabling companies to continually improve their products. It is also appeared like a gold mine of opportunity for those on the look out for such opportunity and soon every country providing subsidies had an enormous number of players setting up business pushing growth beyond the capacity of the planned subsidy limits. All of this was happening at the same time China was going through its own great change and was becoming the manufacturing centre of the world. Solar was seen as an opportunity and before long the country was the leading manufacturer in the world
Issue I 2012 I
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