How the US Lost the Solar Power Race To China (bloomberg.com) 56
An anonymous reader shares a report: Washington blames China's dominance of the solar industry on what are routinely dubbed "unfair trade practices." But that's just a comforting myth. China's edge doesn't come from a conspiratorial plot hatched by an authoritarian government. It hasn't been driven by state-owned manufacturers, subsidized loans to factories, tariffs on imported modules or theft of foreign technological expertise. Instead, it's come from private businesses convinced of a bright future, investing aggressively and luring global talent to a booming industry â" exactly the entrepreneurial mix that made the US an industrial powerhouse.
The fall of America as a solar superpower is a tragedy of errors where myopic corporate leadership, timid financing, oligopolistic complacency and policy chaos allowed the US and Europe to neglect their own clean-tech industries. That left a yawning gap that was filled by Chinese start-ups, sprouting like saplings in a forest clearing. If rich democracies are playing to win the clean technology revolution, they need to learn the lessons of what went wrong, rather than just comfort themselves with fairy tales.
To understand what happened, I visited two places: Hemlock, Michigan, a tiny community of 1,408 people that used to produce about one-quarter of the world's PV-grade polysilicon, and Leshan, China, which is now home to some of the world's biggest polysilicon factories. The similarities and differences between the towns tell the story of how the US won the 20th century's technological battle -- and how it risks losing its way in the decades ahead.
[...] Meanwhile, the core questions are often almost impossible to answer. Is Tongwei's cheap electricity from a state-owned utility a form of government subsidy? What about Hemlock's tax credits protecting it from high power prices? Chinese businesses can often get cheap land in industrial parks, something that's often considered a subsidy. But does zoning US land for industrial usage count as a subsidy too? Most countries have tax credits for research and development and compete to lower their corporate tax rates to encourage investment. The factor that determines whether such initiatives are considered statist industrial policy (bad), or building a business-friendly environment (good), is usually whether they're being done by a foreign government, or our own.
The fall of America as a solar superpower is a tragedy of errors where myopic corporate leadership, timid financing, oligopolistic complacency and policy chaos allowed the US and Europe to neglect their own clean-tech industries. That left a yawning gap that was filled by Chinese start-ups, sprouting like saplings in a forest clearing. If rich democracies are playing to win the clean technology revolution, they need to learn the lessons of what went wrong, rather than just comfort themselves with fairy tales.
To understand what happened, I visited two places: Hemlock, Michigan, a tiny community of 1,408 people that used to produce about one-quarter of the world's PV-grade polysilicon, and Leshan, China, which is now home to some of the world's biggest polysilicon factories. The similarities and differences between the towns tell the story of how the US won the 20th century's technological battle -- and how it risks losing its way in the decades ahead.
[...] Meanwhile, the core questions are often almost impossible to answer. Is Tongwei's cheap electricity from a state-owned utility a form of government subsidy? What about Hemlock's tax credits protecting it from high power prices? Chinese businesses can often get cheap land in industrial parks, something that's often considered a subsidy. But does zoning US land for industrial usage count as a subsidy too? Most countries have tax credits for research and development and compete to lower their corporate tax rates to encourage investment. The factor that determines whether such initiatives are considered statist industrial policy (bad), or building a business-friendly environment (good), is usually whether they're being done by a foreign government, or our own.
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A conservative media pushing climate change as a hoax, thanks Rupert.
even Brother Elon, champion of transition to electric, has made dubious statements on X recently in a bid to curry favor with the November election crew.
The USA could have been a contender, instead under the previous administration they withdrew from Paris rather than fixing it. Donald making weird noises about wind turbines and such, even this week.
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No rare earths involved [Re:Espionage is what...] (Score:5, Informative)
This was killed over a decade ago. First US solar companies were complaining about being hacked, then China started shipping panels cheaper than the rare earths to make them,
Solar panels are not made with rare earth elements. The fact that you think they are indicates that you have not even tried to learn about the subject.
The article we're discussing focuses on the production of polysilicon, the raw material used to make silicon solar arrays, which is the technology of the low-cost Chinese panels that are dominant in the market today. Not a single rare-earth atom to be found.
...Blame the US government for not responding to a trade war. In any other sector, predatory dumping would be responded to quickly and without mercy, but solar was happily ceded offshore, just like TVs, the steel industry, and other things.
In fact, if you read the article, you would have seen that this exactly the opposite of the truth. The U.S. did start a trade war, putting a high tariff on the low-cost Chinese panels with the excuse that the Chinese manufacturers were dumping. In a response, the Chinese put a tariff on their imports of polysilicon from the U.S., once the largest manufacturer of polysilicon, and thence cut their imports of U.S. polysilicon to zero. This helped kickstart their own polysilicon business, now the largest in the world.
The U.S. started and lost the trade war.
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It is this thinking that also leads to USA consumers complaining that BEV are too expensive and only the
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Protective tariffs help domestic companies the same way another fix helps a heroin addict.
Subsidies for R&D sometimes make sense. Corporate subsidies for manufacturing do not.
Our current tariffs on PV panels just make them more expensive and slow the transition to renewable energy.
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Our current tariffs on PV panels just make them more expensive and slow the transition to renewable energy.
I might be cynical, but I believe that was the intended purpose. And I'd bet money that the biggest proponents of those tariffs are taking big dollar donations from big oil.
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More like a vast majority not realizing that real economic growth is dependent on cheap energy. Making energy expensive and rather static by trying to reach green goals assured that places that didn't care about such things would outcompete us easily.
Whatever else you may think, this is just a fact.
While this is a fact, perhaps it would behoove a nation to think about what's more important. Is it more important to keep the economy growing, or to have a place for citizens to continue to prosper within the country. I know we love our competitive metrics, and I know the biggest competitive metric to the oligarchs obsessed with finance is economic, there's still the little, minor issue that we may be headed into a realm where, whether the economy looks good today or not, nothing will look good from the ai
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Except for the little problem of solar and wind being the two cheapest forms of electricity since the Obama administration, with a price stability that fossil energy could hardly dream of:
https://en.wikipedia.org/wiki/... [wikipedia.org]
Sure, existing fossil power is cheaper than building a new renewable plant...until your power plant needs replacing, at which point you have to fork over money to China because they didn't get fooled into ignoring renewable energy technology by stupid-ass culture war politics.
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Because there have never been massive subsidies for fossil energy, right?
Oops! Looks like fossil energy got around $7T of subsidy globally in 2022 alone... [imf.org]
Why don't we remove all the subsidies and see which is cheaper? Hint: it won't be fossil energy.
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Re: There was no race. (Score:2)
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You know what else receives massive subsidies? Fossil fuels:
https://climate.mit.edu/ask-mi... [mit.edu]
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You seem to think that cause and effect has a 4-year statute of limitations.
It doesn't. There are countless examples of policy effects still happening from previous administrations. To suggest otherwise is absolutely ridiculous and shows either how ignorant you are, or how ignorant you are pretending to be.
Here's just one example of many: the Trump tax cuts that is still driving up deficits, while still screwing people in higher cost-of-living states through the elimination of the SALT deduction, which ev
I don't buy it (Score:2, Troll)
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The point was that the U.S. was also subsidizing its solar power industry, but there, it was called "tax break", "zoning laws" or "promoting the industry". But some reasons, the U.S. did not get the same grass roots entrepreneurship out of their subsidies than China got.
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Are you suggesting the US government should force American workers to work for free?
It wouldn't be the first time, or the last. You still get some labor out of convicts "paying their debt to society". What they get paid doesn't really count.
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We do not throw people in jail for belonging to the wrong religion.
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Not yet, anyway.
The Christian Nationalist set gets their way, and we will be in short order.
Its Chinese propaganda (Score:1)
So you did not understand the story at all.
He did, its Chinese propaganda.
The point was that the U.S. was also subsidizing its solar power industry, but there, it was called "tax break", "zoning laws" or "promoting the industry".
The point uses seriously flawed logic. For example conflating cheap landing in industrial parts with zoning. Zoning is one way to get an industrial park, it has nothing to do with the cost. Now the Chinese government building an industrial park, giving industries part of its long term plan, free to cheap land, perhaps even government building the factories for them depending on how strategic they are in the government's industrial plan. Well, that does affect costs.
But some reasons, the U.S. did not get the same grass roots entrepreneurship out of their subsidies than China got.
You didn't
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But some reasons, the U.S. did not get the same grass roots entrepreneurship out of their subsidies than China got.
The reasons, are that there is resistance in the USA. We argue and fight each other over everything.
There is no such resistance in China. The Party makes the plan, and industry follows the plan. The people are educated and trained to fit the roles needed by industry to follow the plan.
A benevolent dictatorship is always the most effective method of getting results. Problems arise when it is not so benevolent. You may remember Tiananmen Square? or the "One Child" program? or the current "tang ping" movem
Re:I don't buy it (Score:5, Insightful)
> The point was that the U.S. was also subsidizing its solar power industry
China has dramatically [weforum.org] outspent the US in subsidies.
But you know what they don't have in China? An entire industry including major media networks dedicated to convincing people renewable energy is wrong for them. Maybe US businesses would have been more enthusiastic about solar if they weren't being lied to about every aspect of it on a near continual basis.
=Smidge=
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I worked in the industry on the polysilicon end, but not Hemlock. The Chinese had an industrial policy that PV was a "must win" technology and everything from cheap loans to cut rate power went into it. There was also the industrial espionage and they even paid for some technology (the Yukon granular polysilicon plant).
Along the way there was also the 57% tariff to make sure even the oldest polysilicon plants could stay in business, and if they needed to dump contaminated silicon tetrachloride somewhere, th
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When the Chinese government says they have a plan to boost a certain industry, entrepreneurs have the confidence to go all in on it. It's not like the government will change to the exact opposite policy in a couple of years due to an election.
Obviously we want to stay democratic, but we could do better. Look at Germany, while far from perfect they do at least stick to industrial policy long term with things like transitioning their energy sector.
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Not commenting on this story specifically, but over the last few years I've come to realize that Forbes has become nothing but a click-bait bullshit factory.
It's far from what it was a decade or two ago. I wouldn't trust anything they publish now. I don't know if Bloomberg is any better or not. I'd probably turn to Matt Ferrell's Youtube channel for it. He did this one on China's rapid growth in renewables about 8 months ago: China's Massive Desert Project [youtube.com]
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From the article you linked:
But cheaper labor makes a big difference as well. Goldman Sachs, in a report, emphasized lower capital costs from “cheaper labour” were a key factor in China’s ability to lower costs, and the Chinese government admits that it operates “surplus labor” programs relocating millions of people from their homes in Xinjiang. It simply denies that it uses coercion in such relocations.
So the Chinese government provides job relocation assistant programs, just like this one [ca.gov], and many other programs [wikipedia.org] that help the poor workers and the American media can immediately spin it as "forced labor" and "slavery". Maybe Americans should check out their forced labor and slavery program of 1.2m (the largest in the world) strong [aclu.org].
No, the government, media, and people in the US are not ignorant. They are just trying to attack their current main geopolitical arch rivals using in [responsibl...ecraft.org]
Hey hey, ho ho, stupid chants have got to go! (Score:3)
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The issue is that Americans tend to wait for the tipping point, while the Chinese make it happen.
They drove the price down with mass production and efficient supply chains, and created the market.
Same thing is happening with EVs. With the exception of Tesla most manufacturers outside China are waiting and seeing what happens, waiting for that tipping point. Chinese manufacturers decided to just get ahead early and are already dominating. They didn't wait for the tech to reach 1000 miles range and 10 second
Well... (Score:2)
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US/EU based cannot externalize the pollution (Score:2, Troll)
Chinese businesses can often get cheap land in industrial parks, something that's often considered a subsidy. But does zoning US land for industrial usage count as a subsidy too?
That's quite a dance you are doing to attempt to manufacture a false level playing field. Cheap land in industrial parks and zoning are two different things. Zoning is one way you get land set aside for industrial parks. It's not about the cost. Cost has to do with location. And in China it has to do with how much you can contaminate the local region. US and EU basically export the pollution of manufacturing, and raw material acquisition, and energy (coal is still heavily used in China, new plants still bui
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Race? (Score:2)
Race? (Score:3)
I know who killed it (Score:2)
SERI is now NREL [Re:I know who killed it] (Score:2)
SERI was renamed the National Renewable Energy Laboratory [nrel.gov] when it was turned into a DOE National Lab in 1991, and is still going strong. NREL research has been responsible for much of the technological advances in solar technology for the last 40 years.
...It was to be the leading source of data about solar energy and employed some of the best scientists and engineers in the field.
It still is.
Re: SERI is now NREL [Re:I know who killed it] (Score:2)
Wrestling Match (Score:2)
I'm calling that as a steaming (Score:3)
The author is attributing their success to a local entrepreneurial spirit? I'm sure it doesn't have anything to do with the borderline-free business loans, loan deferment, land acquisition perks and zero-red tape status that the government gives preferred industries. Let's not forget that their polysilicon is produced by a small army of uighurs, who are absolutely beavering away in brutal manufacturing jobs purely for the love of their Han masters. Certainly, the Chinese solar companies are paying market rates for their input materials, water and power, right? Right?
So much eyerolling that I convulsed a little. I actually read the article. Half of the text is about the polysilicon industry, so much drivel about the farsight of Chinese businessmen and not a single mention of the fact that their workers are near-slaves getting paid pennies an hour. No, clearly the problem is lazy westerners, amirite? They gush about the Tongwei plant like it's a utopia. That company is really high on the list of places that most certainly uses uighur slave labor. Is Bloomberg that much in China's pocket or did this one slip past them? This is a blatant PR piece.
The US has plenty of shortsightedness and lots of it's own problems. We're far from perfect. But losing the solar market was not our fault. China shoveled money and forced labor at the industry and drove prices through the floor. We should be buying their panels. If they want to impoverish their own citizens in order to sell us solar panels below cost, we should oblige them and buy as many panels as they will sell us. The more we buy, the more cheap electricity we get, which totally drives the economy. When they get tired of making us richer, we can spin our solar panel industry back up, any year we want. It's just aluminum, copper, plastic, and bit of polysilicon. Absolutely nothing advanced.
I'm not a China hater. The country has a lot of genuine strengths and accomplishments. But this isn't one of them. Any middle-income country can grow an industry if it throws enough money at it. But at what cost?
China doesn't receive the benefits of diversity (Score:1)
We do.
Worth the trade IMO.
Oh please. (Score:3)
Not that I'm entirely complaining, apart from the coal, gas, and nuclear plant shenanigans...and general support for human rights. The world is definitely benefiting from China's corrupt behavior to some extent. If you have to spew a product into the global economy at turbocharged volume and high holistic cost, solar panels would be one of the most helpful. But I think it will work itself out one way or another. They can't keep doing that - it's unsustainable by definition. Which means either they'll change or they'll fall out and someone else will take up the task; hopefully a free country that avoids shenanigans.
We turned it into an identity marker (Score:2)
We had a multi-trillion dollar jobs program lined up that would have gotten us out of the Middle East once and for all and transformed our energy and we pissed it all away because somebody said the words woke and DEI and that set off about half the country on a tirade.
So we're right back where we are