In Solar Energy Tough Love, I described the perverse impacts of government industrial policy on the solar energy sector in its vainglorious attempt to choose winners and losers. That policy is failing, Solyndra aside.
The market gods hate to be trifled with, and they respond with thunderbolts and torment. Solar’s pain will continue until grid parity is reached. In the meantime, the solar energy sector must purge itself of government subsidies and address its weak financial performance.
So when I read the story in the trade press about SunPower’s wider Q2 losses I decided to get beyond the numbers to look at some of the market factors tormenting the solar business and holding back its true potential.
One key fact is that solar energy demand is up, but so are input costs for solar panels.
Hadrian, the third of the “five good emperors” of Rome, ruled from 117 to 138 in a time of consolidation of the Roman Empire. Best known for building Hadrian’s Wall, which marked the northern most reach of the Roman Empire, his policy focus was securing the Empire by leveraging its strengths rather than overextending its reach. Hadrian had a disciplined attention to detail and focused on the infrastructure needed not only to defend the Empire’s territory but leverage its resource potential and revenue growth.
Today’s economy is marked by uncertainty and volatility at home and abroad. This uncertainty is causing businesses to hoard cash—at last estimate about $1.4 trillion worth.
We have a huge federal deficit, a broken housing situation, and looming costs for unsustainable entitlement programs promised for generations by spend-now, pay-later politicians. …
Part I yesterday described Evergreen Solar Inc.’s recent bankruptcy protection filing, which has left Massachusetts holding the bag for tens of millions of dollars in tax benefits and subsidies for a Devens, MA solar panel factory. Massachusetts wanted to be a true believer, and the promise of 800 jobs in a recession was too good to pass up even if the risks were high.
For politicians looking for good press this was a great opportunity—until reality hit the fan. So what lessons does this failed ‘green’ energy experiment impart for other political jurisdictions eager to create jobs? I offer five.
1. Being green does not mean being sustainable.
Evergreen Solar expanded just as the solar market was reeling from feed-in-tariff (FiT) subsidy cuts in Spain and later Germany, the then hottest markets in the world.…