Here Comes The Sun
Here Comes the Sun
Much attention has been given to alternative energy of late. National Public Radio (NPR), the New York Times, and other high profile organs of the press have had feature stories on how the USA is falling behind China in the production of photovoltaic cells for conversion of solar energy to electricity.
I just heard a discussion on NPR the other day lamenting the fact that China heavily subsidizes their solar energy industry, going so far as to sell solar companies land at one ninth of its value and allowing the companies to then get loans against the full market value of the land to fund operations—all of this in addition to the substantial government-sponsored loans and governmental requirements that developers buy and use the solar company products. The talking heads on NPR moaned over the fact that American solar companies, by comparison, got few such government-sponsored breaks.
My first reaction to this discussion was, “Okay, here’s the defense of the Obama administration’s idiotic loan guarantees to Solyndra. ‘The Chinese are doing it so we have to compete.’” In fact, I have heard exactly this excuse given for the unbelievably wasteful loans made to Solyndra. (It doesn’t help matters to learn that a major contributor to the Obama presidential campaign, George Kaiser, benefited from the deal.)
My second reaction, however, was a bit more useful. After all, politicians are probably stealing each other’s wallets on the Capital steps. Why worry about a scam that the Obama Justice Department is going to bury? That money is gone. It isn’t coming back, and the whores who took it from you and me are not going down as a result of the company’s failure. No, the workers lost their jobs, but the management of the company will walk away relatively unscathed and Mr. Kaiser, it appears, will make out like a rose. No, it’s better to focus on the positive.
What, then, was my second reaction? Why, it was to thank God that China has elected to squander a relatively large measure of their nation’s fortune on the subsidization of their manufacturers of solar panels.
American labor costs are too great for us to ever compete effectively against the Chinese in a straightforward manufacturing effort. Where we do best is in the creation of new technology and in high-end industry where the manufacturing is dependent on highly-trained technicians. For this reason, since the Chinese have elected to distort the market anyway, it is better to let them provide questionable subsidies to the solar energy industry, buy panels from them at the subsidized low price, and install them here to reduce our energy dependence on foreign oil.
It isn’t likely that solar energy is going to replace the USA’s power grid anytime soon, but it is very likely that, with low cost solar panels available from China, we can reduce the demands upon that power grid. Every barrel of oil deferred from the Middle East, Venezuela, etc. is another $100 or so of American money not going to our enemies. That money may go to China in the near term to pay for solar panels, but the panels have a typical lifespan of 25-30 years and the cost of the panels is recouped in 7-8 years, leaving about twenty years of reduced energy cost to every consumer who employs them.
So, what does this mean? Simply this, we can purchase heavily subsidized solar panels from China at low cost to us. We can employ American citizens (or, more likely, Mexican illegal immigrants) to install the solar panels on our dwellings. The power generated by the solar panels will either be used to reduce our individual monthly electricity bills or, in some cases, as in the southern U.S., may actually result in the sale of excess energy back to the local electric utility. All of this can be done at lower than market cost because the Chinese have sought to dominate the marketplace by providing subsidies to their solar industry.
Instead of lamenting the Chinese market manipulation, let us instead embrace the opportunity to take advantage of the Chinese willingness to squander their wealth in foolish attempts to “corner” a market. After all, they will soon enough see the error of their ways and start behaving like a normal, market-driven society. When they do, these kinds of deals will, I suspect, disappear. Now is the time to act and take advantage of their lack of respect for, and understanding of, market fundamentals.
We already know how to make solar panels; in fact, we still have companies in this country making them. However, those companies are unlikely to survive the Chinese competition under current conditions without us falling into the same idiotic mode as the Chinese and mandating expensive subsidies (some of which, as Solyndra shows, already exist). No, we are better off taking advantage of the Chinese misunderstanding of the market for the moment.
It is my understanding that equipping an average home with an effective array of solar panels can cost in the neighborhood of $30,000. If our spendthrift government wants to do something effective, they could simply guarantee loans for this improvement with a ten-year maximum term that banks could then make to consumers. Leave it to the banks to administer the loans and repayment. They’re good at that. With such loans available, the demand for solar panels would likely expand so rapidly that, ironically, it might outstrip the Chinese supply. At that point, the American companies might have a chance to make a buck, even if they were more expensive. After all, in status-conscious America, what upwardly mobile member of the middle class doesn’t want to impress his neighbors with the latest, most technologically-advanced system?
Inevitably, the Chinese subsidies to their solar industry would fade as demand outstripped supply, but that could be well after a substantial reduction in energy demand in this country. So, if you want to be patriotic and reduce our dependency on foreign oil, keep more of our dollars at home, and employ more Americans, buy Chinese solar panels!
Thomas A Hall
Much attention has been given to alternative energy of late. National Public Radio (NPR), the New York Times, and other high profile organs of the press have had feature stories on how the USA is falling behind China in the production of photovoltaic cells for conversion of solar energy to electricity.
I just heard a discussion on NPR the other day lamenting the fact that China heavily subsidizes their solar energy industry, going so far as to sell solar companies land at one ninth of its value and allowing the companies to then get loans against the full market value of the land to fund operations—all of this in addition to the substantial government-sponsored loans and governmental requirements that developers buy and use the solar company products. The talking heads on NPR moaned over the fact that American solar companies, by comparison, got few such government-sponsored breaks.
My first reaction to this discussion was, “Okay, here’s the defense of the Obama administration’s idiotic loan guarantees to Solyndra. ‘The Chinese are doing it so we have to compete.’” In fact, I have heard exactly this excuse given for the unbelievably wasteful loans made to Solyndra. (It doesn’t help matters to learn that a major contributor to the Obama presidential campaign, George Kaiser, benefited from the deal.)
My second reaction, however, was a bit more useful. After all, politicians are probably stealing each other’s wallets on the Capital steps. Why worry about a scam that the Obama Justice Department is going to bury? That money is gone. It isn’t coming back, and the whores who took it from you and me are not going down as a result of the company’s failure. No, the workers lost their jobs, but the management of the company will walk away relatively unscathed and Mr. Kaiser, it appears, will make out like a rose. No, it’s better to focus on the positive.
What, then, was my second reaction? Why, it was to thank God that China has elected to squander a relatively large measure of their nation’s fortune on the subsidization of their manufacturers of solar panels.
American labor costs are too great for us to ever compete effectively against the Chinese in a straightforward manufacturing effort. Where we do best is in the creation of new technology and in high-end industry where the manufacturing is dependent on highly-trained technicians. For this reason, since the Chinese have elected to distort the market anyway, it is better to let them provide questionable subsidies to the solar energy industry, buy panels from them at the subsidized low price, and install them here to reduce our energy dependence on foreign oil.
It isn’t likely that solar energy is going to replace the USA’s power grid anytime soon, but it is very likely that, with low cost solar panels available from China, we can reduce the demands upon that power grid. Every barrel of oil deferred from the Middle East, Venezuela, etc. is another $100 or so of American money not going to our enemies. That money may go to China in the near term to pay for solar panels, but the panels have a typical lifespan of 25-30 years and the cost of the panels is recouped in 7-8 years, leaving about twenty years of reduced energy cost to every consumer who employs them.
So, what does this mean? Simply this, we can purchase heavily subsidized solar panels from China at low cost to us. We can employ American citizens (or, more likely, Mexican illegal immigrants) to install the solar panels on our dwellings. The power generated by the solar panels will either be used to reduce our individual monthly electricity bills or, in some cases, as in the southern U.S., may actually result in the sale of excess energy back to the local electric utility. All of this can be done at lower than market cost because the Chinese have sought to dominate the marketplace by providing subsidies to their solar industry.
Instead of lamenting the Chinese market manipulation, let us instead embrace the opportunity to take advantage of the Chinese willingness to squander their wealth in foolish attempts to “corner” a market. After all, they will soon enough see the error of their ways and start behaving like a normal, market-driven society. When they do, these kinds of deals will, I suspect, disappear. Now is the time to act and take advantage of their lack of respect for, and understanding of, market fundamentals.
We already know how to make solar panels; in fact, we still have companies in this country making them. However, those companies are unlikely to survive the Chinese competition under current conditions without us falling into the same idiotic mode as the Chinese and mandating expensive subsidies (some of which, as Solyndra shows, already exist). No, we are better off taking advantage of the Chinese misunderstanding of the market for the moment.
It is my understanding that equipping an average home with an effective array of solar panels can cost in the neighborhood of $30,000. If our spendthrift government wants to do something effective, they could simply guarantee loans for this improvement with a ten-year maximum term that banks could then make to consumers. Leave it to the banks to administer the loans and repayment. They’re good at that. With such loans available, the demand for solar panels would likely expand so rapidly that, ironically, it might outstrip the Chinese supply. At that point, the American companies might have a chance to make a buck, even if they were more expensive. After all, in status-conscious America, what upwardly mobile member of the middle class doesn’t want to impress his neighbors with the latest, most technologically-advanced system?
Inevitably, the Chinese subsidies to their solar industry would fade as demand outstripped supply, but that could be well after a substantial reduction in energy demand in this country. So, if you want to be patriotic and reduce our dependency on foreign oil, keep more of our dollars at home, and employ more Americans, buy Chinese solar panels!
Thomas A Hall
"We originally considered using a politically appropriate video to reinforce the substance of the article, and then it became clear that we needed something a little different. Something that more accurately reflects the economic policy of our government and the wisdom therein!"
The Editors
The Editors