Right in the Solar Plexus

The Western world was at the heart of the earliest inventions that generated electricity from the sun. You have to go way back to 1882 to an American, Charles Fritts, who actually invented the first photovoltaic cell, although a French scientist, Antoine César Becquerel, actually noticed the possibility of solar power even farther back in 1839 when he saw that an electrode immersed in an electrolyte solution began to generate electricity when light fell on it.

Modern solar electricity was born in 1941 at the famous Bell Laboratory, where researcher Russell Ohl produced the first silicon based solar cell. “The mass production, however, took more than a decade and could begin only in 1954. The solar cells of that period were not very efficient; they were converting only 4% of the sunlight into electricity. Developments continued and by the 1980s, we had solar cells which were 20% efficient and the efficiency reached a 24% by the end of the century. Research still continues and some experimental solar panels have already achieved more than 40% efficiency.” TheGeminiGeek.com. Obviously, the underlying patents on this technology expired decades ago.

Back in the 1970s, with the oil embargo, interest in alternative energy accelerated, and potential of the sun was much touted, reminiscent of the cries for such developments today. “This was a great opportunity to utilize solar power; in fact the US Department of Energy financed the Federal Photovoltaic Utilization Program. This program was responsible for the installation and testing of over 3,000 photovoltaic systems.” Historyofsolarpower.com

In the 1980s, the United States dominated the field of solar panel manufacture, but the costs were high, and the time was clearly not right. A fall in the price of oil doomed the effort instantly. “A Los Angeles based company called Luz Co. produced 95% of the world's solar-based electricity. They were forced to shut their doors [in 1991] after investors withdrew from the project as the price of non-renewable fossil fuels declined and the future of state and federal incentives were not likely.

“The chairman of the board said it best: ‘The failure of the world's largest solar electric company was not due to technological or business judgment failures but rather to failures of government regulatory bodies to recognize the economic and environmental benefits of solar thermal generating plants.’” Facts-About-Solar-Energy.com. Instability in the Middle East, rising demand for energy from China and the rest of the emerging world reignited interest in renewable energy, and America once again led the charge to make and sell solar panels globally in the new millennium. And then the recession hit. The inability of companies and homeowners to afford an expensive solar upgrade, the decline in new construction from the precipitous decline in real estate values and hyper-acceleration in the number of foreclosures and China’s inevitable ability to undercut costs cut the legs out from under the U.S. initiated effort to commercialize solar power.

In August, three U.S.-based solar panel manufacturers filed for bankruptcy. China suddenly was left with three-fifths of the global market, even though we make better stuff: “Some American, Japanese and European solar companies still have a technological edge over Chinese rivals, but seldom a cost advantage, according to industry analysts… Loans at very low rates from state-owned banks in Beijing, cheap or free land from local and provincial governments across China, huge economies of scale and other cost advantages have transformed China from a minor player in the solar power industry just a few years ago into the main producer of an increasingly competitive source of electricity… China’s three biggest solar power companies — Suntech Power, Yingli Green Energy and Trina Solar — have all in the last [few] weeks announced second-quarter sales increases of 33 to 63 percent from a year earlier.” New York Times, September 1^st.

With energy needs soaring and the cost of solar panels declining, China appears to be at the right place and the right time: “Solar panel prices have plunged by 30 to 42 percent per kilowatt-hour in the last year as manufacturers have sharply increased capacity, particularly in China. Meanwhile, demand has been somewhat weak in the main markets in the United States and Europe… The United States and the European Union have tried to build demand for solar power by subsidizing the buyers of solar panels. But increasingly those subsidies are being used to buy solar panels from China.” NY Times. As China exports 95% of their manufactured panels, competitors point to a heavily subsidized Chinese industry, ranging from free land to build plants, providing substantial subsidies to alternative power-device manufacturers and deterrents to importing comparable manufactures for local use. And the last initiative you can expect from a government focused on austerity is any support for local American manufacturers beyond the usual screams and pressures against the Peoples Republic for unfair trade practices.

I’m Peter Dekom, and it is galling that we seem to be on a continual loop of “we invent it, but China makes it” path.