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How the US Lost the Solar Power Race To China (bloomberg.com) 110

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.

How the US Lost the Solar Power Race To China

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  • by RobinH ( 124750 )
    There's lots of evidence [forbes.com] that China's government subsidized it's solar industry, including by using slave labour. This story doesn't pass the sniff test.
    • by Sique ( 173459 ) on Wednesday October 09, 2024 @04:27PM (#64851931) Homepage
      So you did not understand the story at all.

      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.

      • 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)

        by Smidge204 ( 605297 ) on Wednesday October 09, 2024 @05:14PM (#64852083) Journal

        > 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=

        • by Anonymous Coward

          China has dramatically outspent the US in subsidies.

          You shouldn't forget that Chinese companies are selling panel modules for less than cost. https://www.reuters.com/busine... [reuters.com]

          with some module-only manufacturers taking orders at negative margins to preserve market share

          • We should buy as many as we can and thank the Chinese citizens for subsidizing our purchases of their solar panels. Better yet if we can figure out a good way to recycle and recover the resources that go into their manufacturing. We have deep enough pockets to financially punish anyone stupid enough to engage in dumping and if we get cheap solar while doing so, why not?
      • Re:I don't buy it (Score:4, Informative)

        by Mspangler ( 770054 ) on Wednesday October 09, 2024 @05:24PM (#64852097)

        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, they did. You can do a lot when industrial policy comes with that sort of backing.

        So in a fine example of ruthless mercantilism they took over the market. And they are doing the same with EVs while "Joe Biden" blocks every new copper mine and environmentalists wring their hands over a patch of buckwheat that sits over a lithium deposit and block that too.

      • by AmiMoJo ( 196126 )

        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.

        • by sfcat ( 872532 )
          Germany's policies have been an outright disaster. That you can look at their expensive and very dirty grid and call that an example to follow is amazing. What color is the sky in your world?
          • by AmiMoJo ( 196126 )

            As I said, far from perfect, but they have managed to get industry to invest in it by creating certainty.

            Anyway, do you have a better idea for how we can compete?

            • And they as a result have more expensive and dirtier energy than the US and even compared to when they started. China has not invested massively in green energy, they invested in energy, period, as a percentage they are not creating the energy they require any more from solar than either the US or Germany. Basically they invested in TW worth of coal and gas and then dangle the few MW in effective production as a prize to the useful idiots.

        • Well, they could start by not doing that debt-ceiling extortion thing every time the budget comes around. Talk about a country shooting itself in the foot... repeatedly!
    • by Anonymous Coward

      Slave labor is probably more bullshit than reality. But China's government did subsidize the industry because they wanted to move on to greener energy. That's why they are constantly installing more than 50% solar panels, etc. It's simply because no one out there could manufacture at the size needed. It's the same with steel and concrete, etc. No one could manufacture what was needed, so they produced it themselves, and sell just about 10% of whatever is the left over overseas. The market for these pr

    • Re: (Score:2, Insightful)

      by pr0t0 ( 216378 )

      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]

    • Re: (Score:2, Insightful)

      by hackingbear ( 988354 )

      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]

  • It doesn't seem to take much investigative sleuthing to determine what happened here. Everyone in America was conditioned by fifty years of unfounded exaggerations that solar power was going to take over any day now that they didn't detect the tipping point when it actually came. By then most of the world's heavy manufacturing capacity had moved to China already. Also, the need to transition off of petrochemicals has been a front line in the Culture Wars at least since the Carter administration, so about half of all Americans are irrationally opposed to solar on top of historically being more-or-less rationally opposed to it. No such dynamic exists in China.
    • by Anonymous Coward

      This is some of the craziest mental gymnastics I've ever seen on Slashdot.

    • by AmiMoJo ( 196126 ) on Wednesday October 09, 2024 @05:24PM (#64852099) Homepage Journal

      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 charge time, they pushed ahead.

      Europe only did a little better in that regard. We do have a lot more EV models and chargers than the US, but still nothing like China.

      Same with wind turbines and many other things.

      • They drove the price down with mass production and efficient supply chains, and created the market.

        They drove the price down with SLAVE LABOR [reuters.com] and subsidies for the purpose of enabling DUMPING [reuters.com]. They sold panels to the west below cost.

  • That's like just your opinion, man.
  • 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

    • by RossCWilliams ( 5513152 ) on Wednesday October 09, 2024 @06:03PM (#64852221)
      I agree zoning is not a subsidy. But there are government subsidized industrial parks all over the United States. Most states have explicit programs to attract industry. Its just plain silly to suggest the United States isn't subsidizing industry, including solar panel assembly plants. The simple reality is that "American" companies took the capital created here and invested it in China. So new plants in China, aging plants in US. Its not surprising that eventually there were no plants left in the US. Most "American" companies have more employees outside the country than here. The big companies here are basically marketing operations. I don't think Nike has ever produced a shoe in the United States.
      • by drnb ( 2434720 )

        I agree zoning is not a subsidy. But there are government subsidized industrial parks all over the United States. Most states have explicit programs to attract industry. It's just plain silly to suggest the United States isn't subsidizing industry, including solar panel assembly plants.

        Good thing no one is saying that. What is being said is the subsidies and support and protection in China is far greater. A professor in college had toured the iPhone manufacturing complex in China. During the conversation the manager said that the government wanted them to win the contract so they promised to build them the factory at no cost to the company.

        The simple reality is that "American" companies took the capital created here and invested it in China.

        That happened too. Here China's practice of letting the companies externalize the pollution comes into play.

        So new plants in China, aging plants in US.

        Aging buildings perhaps. Many of those plan

        • What is being said is the subsidies and support and protection in China is far greater

          So subsidies and support are fine as long as they aren't any larger than the United States subsidies? Aside from the question of why we get to set the appropriate levels, I think if we thought that was the only problem we would simply match their subsidies.

          That is a consumer choice.

          No, its Nike's choice. But you missed the point which is that the way to make big money in United States is not by making stuff, its by selling it. We stopped making stuff and now we don't know how. American companies are mostly run by people trained in f

  • What race? Since when has it been a competition? China is still using vast amounts of non-solar power. The biggest factor was probably that China needed to greatly increase their total power production to meet their current needs, while the US has plenty of existing power production. Only a few years ago China was rationing power to various industries. There is a lot less incentive to build solar power facilities, when they will not produce a return, because power is not in short supply. The shortages
  • by Darren Hiebert ( 626456 ) on Wednesday October 09, 2024 @04:50PM (#64852011) Homepage
    Does everything have to be about race? :-) How is solar power a race? If one country does well at it, how does that somehow cause another country to lose anything? In a real race, you lose the award. In solar energy, it only matters that you get there—not that you get there first. The quicker everyone gets there, the better off we all are; we are not somehow worse off because other got there quickly or first.
    • ... got there quickly or first.

      Your win-win philosophy isn't wrong but it's not whole picture.

      Once the technology was developed, green energy is cheap energy: That means cheap manufacturing. That's beneficial to the biggest war-machine and most-conspicuous consumers on the planet.

  • I was living in Golden CO when they built the Solar Energy Research Institute (SERI) in 1979, then Reagan was elected and he cut their budge from $124 million to $59 million in 1982 and laid off 2/3 of the scientists. It was to be the leading source of data about solar energy and employed some of the best scientists and engineers in the field. So when we look at how the US fell behind in solar, this is where it started. https://psmag.com/environment/... [psmag.com]
    • 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.

      • In my experience, NREL is a bunch of eggheads focused on incremental efficiency gains and advanced materials. That's definitely important, but all the easy gains were made decades ago. They also live in academia and focus on those sorts of problems, ignoring the practical side. For example, there is no shortage of NREL work related to different panel chemistries. But if we look at the biggest problems with solar right now (hail, excessive cost cutting from top to bottom, and local site-specifix environment
        • by shilly ( 142940 )

          Haven’t there been major advances in panel chemistries in the past few years? As well as in bringing manufacturing costs down? And aren’t we on the verge of new chemistries that will make a big difference? Perovskites, tandem, thin-film, etc?

  • We are losing the race with China in a lot of ways. They are now faster than we are. But we are doing our best to turn it into a wrestling match. I'm not sure we will win that either. But being partners with a bunch of chinese merchants is not acceptable to the folks from Harvard and Yale. They are the world's leaders and determined to stay that way even if its leading a shrinking poorer world beset by natural catastrophes caused by global warming.
  • by hdyoung ( 5182939 ) on Wednesday October 09, 2024 @05:18PM (#64852089)
    5-ton load of grade A horse manure.

    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?
    • by Anonymous Coward

      Good post. We should definitely be buying up those cheap solar panels. We should be doing the same with EVs as well. If China wants to make cheap EVs, we should be able to buy them. Just goes to show, regardless of who is in charge, the profits of American companies are more important then anything else, including the environment.

      • Cheap chinese EVs are a serious security problem, and I still question their long-term quality.

        Chinese solar panels have proven themselves to be solid products, and they’re not internet-connected. And solar panels are an environmental positive. The sooner we kick our addiction to fermented dinosaur, the better off the world will be.
    • Bloomberg is just a blog site now. You might as well read Livejournal.

  • Oh please. (Score:5, Informative)

    by Eunomion ( 8640039 ) on Wednesday October 09, 2024 @05:42PM (#64852161)
    I've been tracking the solar industry since the early '00s, and China's formula there is the same as its formula in every other industry: Massively externalized cost, allowing it to undercut prices. They would literally do shit like build a government-subsidized coal power plant to run the factory making solar panels (and now are building nuclear plants to do the same), effectively hiding the capital cost of the factories. Labor rights are nonexistent, so worker pay stays low in comparison to anyone but other authoritarian states.

    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.
    • I've been tracking the solar industry since the early '00s, and China's formula there is the same as its formula in every other industry: Massively externalized cost, allowing it to undercut prices. They would literally do shit like build a government-subsidized coal power plant to run the factory making solar panels (and now are building nuclear plants to do the same), effectively hiding the capital cost of the factories.

      Oh, really? Any their government-built power plant only supplies to some solar panel factory and nobody else can get the power? Where is it? In Wisconsin [aaahq.org]? Or in Arizona [reuters.com]? North Carolina, Kentucky, Mississippi, Texas, Michigan [goodjobsfirst.org]?

      You either know nothing or the best you could say would be "the same as its formula in the USA". Yet your fellow citizen modded you "informative".

      Labor rights are nonexistent, so worker pay stays low in comparison to anyone but other authoritarian states.

      Like in capitalist [columbia.edu] states [aclu.org]?

  • Hating on green energy became an identity marker for a certain class of people. Something that they could use to identify members of their community and decide who was and wasn't part of their in group.

    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
  • One political party denies the need for clean power. Their platform denies global warming. Almost every project is fought by "local" astroturf campaigns funded through Fossilista funded groups.

    Trump and all his lackeys are calling to defund solar projects. Trump thinks windmills kill birds (about 1% as many as cats, about 10% as many as powerlines. And the whales...

    What did you expect?

  • Climate-change denial, and tone-deaf, brain-dead propping up the fossil fuel industries, mainly coal and oil, by our so-called 'conservatives' in this country, and actively standing in the way of progress in renewables as well.
    Having an entire political party that actively wants to drag us all backwards both techonologically as well as sociologically as well as politically is a cancer on our entire society, and that's precisely what they've been doing for decades and decades now, and will continue to do until they are rendered irrelevant in our government.

    Go ahead and mod me down to '-1, Troll', I'll just keep reposting this same comment until you jackasses run out of moderation points.
  • Now there you have some unfair trade practice!
    Ever seen a drag queen working in a solar cell factory in China?
    Bet you never have.

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