The company that owns Uni-Solar in Greenville says it will lay off 300 people from the solar roofing business. Michigan based Energy Conversion Devices was going to auction off Uni-Solar but Tuesday's auction was canceled because no acceptable bids were placed.
Uni-Solar's parent company filed for bankruptcy in February. The workers in Montcalm County were then placed on furlough.
Company officials blame the over production of solar panels and the end of federal incentives for its downfall.
Sounds to me like without all the corporate welfare subsidies, the American solar panel industry is simply not viable.
It really is true, as comedian Doug Stanhope has asserted, that a majority of Americans will express their opinion about an issue even when they have no basis of knowledge for which to even form an opinion. That point was driven home in a recent article from UPI entitled, “Poll: Alternative Energy Loses Support.” Why the pollsters even bother polling on an issue so technically complex that no more than a small percentage of the population is well informed enough to provide meaningful answers is a whole separate topic. Instead, I thought I would go through and pick the results of this particular poll apart point by point.
Let’s get started, shall we?
Support for development of fuel sources such as wind and solar power has diminished in the United States during the past year, a survey found.
The March 7-11 poll, conducted by the Pew Research Center for People & the Press, found 52 percent of those responding indicated support for alternative fuel was more important than increasing oil, coal and natural gas production, while 39 percent indicated expanding exploration of coal, oil and gas was the more important of the two choices.
Although a majority went for alternative fuels, support for solar, wind and hydrogen power was not as popular as it had been in March 2011, when 63 percent indicated that was their favorite choice, while 29 percent chose coal, oil and gas exploration.
Respondents who identified themselves as Republicans were more apt to have changed their preferences -- with 33 percent indicated support for alternative energy sources, down from 47 percent in 2011.
Do I really need to waste the pixels pointing out that asking people whether they “support” development of alternative energy versus whether they “support” increased oil, coal and natural gas production is laughably meaningless? The question makes it sound as if all forms of energy are interchangeable and unlimited, and how we power our lives is merely a matter of the choices we collectively make.
On the one hand, you can “support” solar and wind power all you want, but that doesn’t mean either form of energy will ever be a viable replacement for fossil fuels and enable you and your descendents to live your suburbanized, consumerist lifestyle in perpetuity. The fact is that while both do have their uses and COULD be a part of voluntarily powered down future if America was willing to be sensible about its energy predicament, neither is going to allow us to continue on with business as usual once fossil fuels deplete to the point where they are too expensive to keep supporting our modern industrialized civilization.
On the flip side, you can “support” increasing the production of oil, coal and natural gas; and while you are at it you might as well try holding your breath until Santa Claus brings you a new Lexus for Christmas. The world supply of all three is FINITE. That means there is only so much of it that can EVER be produced. What’s more, most of the easy and cheap to extract stuff is already gone and what’s left is going to be ever more costly and difficult to produce. Child-like wishing for more isn’t going to change geology.
Let's move on:
The survey found "as in the past ... there continues to be broad public support for an array of policies aimed at addressing the nation's energy supply."
Nearly 80 percent overall indicated support for improving fuel efficiency in cars, while nearly 70 percent indicated support for federal research for alternative energy sources. Sixty-five percent indicated support for improved rail, bus and subway systems.
Sure, no doubt there is “broad public support” for all of that stuff. You know why? Because it doesn’t cost the respondents anything to answer the questions in a public opinion survey.
Once you start moving beyond feel good concepts and into how all of those policies are going to be PAID FOR it becomes a different equation altogether. Try asking, “Would you be willing to pay an annual $1,000 carbon tax to support the federal research for alternative energy sources and for improved rail, bus and subway systems?” or “Should federal government funds be used for public transportation INSTEAD OF building more roads and highways?” and I’ll guarantee you the poll results would be drastically different.
Once again, the choices are presented in a vacuum, as if each one does not carry considerable costs and consequences. This is exactly the kind of thinking that created Spoiled Rotten Nation, and a citizenry that just cannot understand how the government can’t seem to do everything they want it to do without raising their taxes and/or running massive budget deficits. We want alternative energy research, AND public transportation, AND more roads and highways to reduce traffic congestion, BUT we don’t want to pay for any of it.
But they saved the very best part for last:
Concerning the controversial method of mining called fracking, 37 percent indicated they have only heard a little about it and 37 percent, indicated they have never heard of it. Only 25 percent indicated they had heard a lot about it.
A majority -- 52 percent -- indicated support for fracking, a figure held up mostly by Republicans, 73 percent of whom indicated they supported fracking, compared to 33 percent of Democrats.
You gotta love the willingness of so many to support something they know very little or nothing about. Despite the fact that only a quarter of the population has by its own admission any real idea what fracking is, more than half claim to support it. And that 25% constituting the at least reasonably well informed doesn’t include people like me who know a lot about fracking but are opposed to it because we know what the dangers are. The more appropriate question to ask here would be, “Would you support fracking even if it meant there was a good chance that your drinking water might be poisoned or that a resulting earthquake might damage your home?” That at least might get a few of the respondents thinking, yet another resource which is in very short supply these days.
Bonus: I've posted this video before, but it is too funny not to repeat
Green energy is the wave of the future that is going to save our economy by being a huge driver for employment. Or so says the bullshit propaganda. But despite oil prices hovering in the low triple digits, the solar industry is having huge problems, as reported by Forbes:
Japanese solar company Sanyo plans to lay off about 140 employees in California, or about 40 percent of its manufacturing workforce in the United States, as it shifts its strategy in order to compete with large rivals, particularly those from China.
Sanyo is closing the 30-megawatt factory in Carson that makes silicon ingot and wafers – the materials for making solar cells – after setting up shop there in 2003. Production will stop at the end of March to coincide with the end of the company’s fiscal year, said Aaron Fowles, a Sanyo spokesman, on Friday. The company plans to liquidate the assets and close the factory for good in October.
But wait...there's more:
The planned factory shutdown by Sanyo follows a series of layoffs and solar factory closures in the United States and elsewhere over the past year. Manufacturers have struggled to survive when there is a glut of solar panels and the wholesale prices for them have fallen by 40-50 percent. The glut is partly caused by the lowering of government subsidies in big solar markets such as Germany and Italy in 2011.
Earlier this month, California-based Amonix said it was letting go 200 of the roughly 300 workers at its North Las Vegas factory, which it opened last year with a promise to bring lots of local jobs. Amonix said it needed to cut staff so that it could modify the production equipment and start making a new line of solar energy systems later this year. Some workers there told the Las Vegas Sun that they didn’t know their employment would be so temporary.
Also earlier this month, Boston-based Satcon Technology, which makes power conversion equipment for solar electric systems, said it was laying off 35 percent of its workforce and shutting down a factory in Canada. Two German manufacturers who set up factories in the United States, SolarWorld and Solon, have shuttered some of the production here.
Several manufacturers who didn’t have enough money or unable to reduce their costs quick enough to stay in business have filed for bankruptcies, including Solyndra, SpectraWatt and Evergreen Solar.
So what's the problem?
Some manufacturers blame their Chinese rivals for the pileup of unused solar panels and the big drop in prices. SolarWorld, which runs a solar panel factory in Oregon, joined six other manufacturers in filing a trade complaint with the U.S. International Trade Commission and the U.S. Department of Commerce last October. The companies contend that Chinese manufactures are selling their products at prices far below the cost of producing them, and they are able to do that because they receive heavy and unfair subsidies from the Chinese government.
The fact that Chinese workers are willing to do the job for a fraction of what Americans are paid is no doubt a factor, as is the fact that China essentially has no environmental regulations. Look, we can argue all day about whether large scale solar power really has the potential to replace fossil fuels (as I've said before, I'm not a subscriber to that theory). Nevertheless, even if it could be part of the answer, I think it is clear from this story that as long as we have unrestricted globalization, what solar power will certainly not be able to do is create a substantial number of new good paying jobs in this country as politicos like President Hopey-Changey would like us to believe.
Addendum: After composing this post, I found another story about an impending solar company bankruptcy, this time in Delaware. Here is Canadian Business with the details:
A Delaware-based solar power company has filed for Chapter 11 bankruptcy protection.
New Castle-based Suntricity Power listed estimated assets of between half a million and a million dollars, and estimated liabilities of between $100,000 and $500,000 in its filing Tuesday in U.S. Bankruptcy Court in Wilmington.
Suntricity, founded in 2007, designs, sells and installs solar energy systems for residential and commercial customers.
The hits just keep on coming for the solar power industry:
MEMC Electronic Materials Inc. will undertake a major restructuring that includes closing plants, laying off more than 1,300 workers, or about a fifth of its work force, and taking a charge of about $700 million in the current quarter.
The move is an effort to reduce production capacity and quickly lower operating costs in light of weak demand for semiconductors and the bottom dropping out of the solar market due to oversupply.
You would think that being forced to fire a fifth of your employees might make a corporate manager a bit pessimistic in their outlook. But of course, you would be wrong:
"We believe these actions strengthen MEMC in the near term and position us for more profitable growth in our core businesses – semiconductor wafers and solar energy systems," said Ahmad Chatila, MEMC's chief executive. "Changed market conditions require that we improve productivity across all segments and in solar move to a more balanced manufacturing model aligned with our downstream business."
That doesn't even make good nonsense. See why CEOs are paid 400 times what the average worker makes? The rest of us just don't have the imagination to come up with such golden bullshit, or the gonads to say it in public.
Just when you thought the whole seedy Solyndra scandal couldn't get any worse, it just did according tho this report in the Washington Post today:
Solyndra’s chief executive warned the Department of Energy on Oct. 25, 2010 that he intended to announce worker layoffs on Oct. 28. He said he was spurred by numerous calls from reporters and potential investors about rumors the firm was in financial trouble and was planning to lay off workers and close one of its two plants.
But in an Oct. 30, 2010 e-mail, advisers to Solyndra’s primary investor, Argonaut Equity, explain that the Energy Department had strongly urged the company to put off the layoff announcement until Nov. 3. The midterm elections were held Nov. 2, and led to Republicans taking control of the U.S. House of Representatives.
So the Obama administration was trying to conceal the fact that the solar panel company it gave a half-billion dollars in loan guarantees to was failing until after last year's mid-term elections. That's bad, but it gets worse:
On Nov. 3, 2010, Solyndra announced it would lay off 40 workers and 150 contractors and shut down its Fab 1 factory. The department agreed to continue giving Solyndra installments of its federal loan despite the company’s failure to meet key terms of the loan, and in February restructured its loan to give investors a chance to recover $75 million in new money they put into the company before taxpayers would be repaid.
Bad enough that the administration was playing politics with the timing of layoff the announcement, but it is even more abhorhent that it was deliberately placing the financial interests of private investors over those of the taxpayers. Combined with the story I posted this morning about a $443 million dollar contract for an unnecessary smallpox vaccine being given to a company controlled by a wealthy Obama campaign donor, and you can begin to see the pattern here. Obama is not a socialist, but a crony capitalist. And unlees you're one of his billionaire cronies, you're the one getting stuck with the bill.
It really is amazing that at a time when world oil prices remain in the triple digits that solar panel companies seem to be dropping like flies. Here is a recent report on the latest casualty:
Energy Conversion Devices Inc. said late Tuesday it plans to furlough 400 workers as it temporarily halts production of solar energy products, and plans to lay off another 500 employees across the company by the end of 2011.
The Auburn Hills-based company said the furloughs include more than 140 employees who last week were given temporary layoffs at United Solar Ovonic plants in Greenville, plus manufacturing employees in Ontario and Mexico, citing high inventory levels.
"As we sell through that inventory, we'll resume production," said Michael Schostak, a company spokesman.
High inventory levels were also cited in a similar story I reported here two weeks ago about First Solar. Clearly, solar panels are not selling like hotcakes despite high energy prices. For Energy Conservation Devices, the news gets even worse:
The company posted a net loss of $306.4 million in the 2011 fiscal year ended June 30, including a net loss of $42.1 million in its fiscal 2011 fourth quarter.
Some analysts have said the company could be heading toward bankruptcy.
"Bankruptcy continues to become more and more likely, although it still is possible ECD could make it through the next year," Morningstar Inc. analyst Stephen Simko wrote in a late August note to investors.
I would never pretend to call myself an expert on solar energy, but it should be plainly obvious that there are very serious problems in an industry that despite government tax incentives and loan guarantees is unable to find profitability at a time when it ought to be booming.
I previously covered the implosion of solar panel maker Solyndra, the unfortunate company that went bankrupt in August despite having received over $500 million in loan guarantees from the Obama administration. At the time, I asserted that the real problem with solar energy is in trying to force it to do something it is not capable of doing: namely, simply replacing oil, coal and gas and allowing business as usual to continue as if nothing has changed.
Now on top of the Solyndra debacle comes word that America’s leading solar panel manufacturer is also in trouble. Here is Renewable Energy World.com with the details:
What's going on at First Solar? The company, a pillar of the solar industry, on Tuesday announced what seemed an abrupt departure of its CEO, Robert Gillette, and the return of its former chief executive, Mike Ahearn, during a time when the company and the rest of the industry are dealing with a market marked by an oversupply of solar panels and plummeting prices.
First Solar’s shares plummeted 26 percent to reach $43.06 per share near Tuesday's closing.
Hmmm…that doesn’t sound too positive. So what’s the problem?
But 2011 so far is turning out to be an awful year for First Solar and the industry overall. The falling incentives in Germany, Italy and France — and the delay by project developers to complete projects — have led to several gigawatts of solar panel inventories industrywide and crashing prices. First Solar has experienced huge drops in earnings this year. Gillette told investors in August that there should be a rebound in the second half of 2011.
But the big drop in silicon solar pane prices — between 30 and 40 percent so far this year — presents a growing threat to First Solar’s advantage as a low-cost solar panel maker. First Solar uses cadmium-telluride instead of silicon for its solar panels.
So lessee now, rising inventories and crashing prices for solar panels, all at a time when oil prices remain elevated far above their historic norms. Anything to add?
The company initially won promises of federal loan guarantees for four of its U.S. solar farm projects, but lost the one that would have guaranteed a bulk of a $1.9 billion project in California called Topaz Solar Farm. It was able to finalize the loan guarantees for three other projects and sell them to utilities and other investors.
First Solar needs to find a buyer for the 550-megawatt Topaz project, and that has proven a rather difficult task. A report emerged Monday that a potential buyer, Enbridge, backed out of the deal.
So in other words, without the federal government propping them up, First Solar would quickly go the way of Solyndra. This is yet another nail in the coffin for the hopes that solar energy will save us from the onrushing effects of both climate change and fossil fuel depletion. The only way out of those predicaments is to power down. Solar power on a localized, sustainable scale could be a part of that. Too bad we're so determined to pound this square peg into the round hole of business as usual.
The recent Solyndra scandal in which the solar panel company received over a half-billion dollars in loan guarantees from the Obama administration, only to go bankrupt and be raided by the FBI two years later, brought negative attention to the solar power industry just at a time when many are looking to it to “save” us from our fossil fuel and global warming predicaments. Time will tell if Solyndra failed due to mere incompetence or instead because of outright fraud, but one of the excuses made by the company for failing so spectacularly is that it was being undercut by state-sponsored solar power manufacturers in China.
Fair enough, let’s then divert our attention to the other side of the globe for a moment and see how things are going over there. Oops, not too well as it turns out, at least in one case. Here’s the New York Times with the story:
The authorities have suspended production at a solar panel factory in eastern China following protests by residents who blame the plant for fouling the local air and water, a government Web site said on Monday.
Hmmm…that doesn’t sound too good. Please elaborate:
Villagers have complained about toxic smokestack omissions and factory wastewater they say killed a large number of fish. Government inspectors have confirmed that fluoride contamination was 10 times higher than acceptable levels after heavy rainfall swept improperly stored wastewater into a canal, according to the state-run media.
Local residents have also blamed the five-year-old plant for what they claim is an unusual number of cancer deaths, although local officials say such fears are exaggerated.
According to the Haining city Web site, JinkoSolar has been fined about $74,000. Company employees reached by phone on Monday declined to comment.
So let’s see here. Toxic smokestack emissions and wastewater, plus a higher number of cancer deaths. Sounds like the kind of side effects that might result from residing near a more conventional power plant, doesn’t it?
What this article clearly demonstrates is one of the little inconvenient truths about so-called “green” energy: that it is still very much reliant upon dirty, old fashioned manufacturing techniques in order to make it viable. You want a wind turbine, or a solar panel, or a battery for an electric car? They got to be built somewhere, and it takes much more than just wind or solar generated electricity to manufacture them. The process may be many things, but one thing it is NOT is environmentally friendly.
The real problem with wind power or solar energy is not that they don’t have their benefits. It is obvious that they can be quite useful on a small, localized scale. No, the trouble comes when they are touted as being the next generation of energy sources that will replace fossil fuels without us having to make any meaningful changes in our lifestyles or to our economy.
It is just this sort of delusional thinking that caused the Obama administration to give those huge loan guarantees to Solyndra. Defenders of the administration are now claiming that even though Solyndra failed, the idea to promote solar energy was sound and can be done right next time around. What they refuse to understand is that squandering the government’s rapidly constricting financial resources on a pipe dream of maintaining business as usual in a glorious, green energy-fueled future is actually worse than doing nothing at all.
In my September 1st post, "Half-a-Billion in Taxpayer Dollars Down the Drain for a Solar Energy Pipe Dream," I wrote about the bankruptcy of the Solyndra corporation a mere two years after the company received over a half-a-billion dollars in loan guarantees from the Department of Energy. At the time, I concluded:
To be that far off the mark with your business model, you have to be either completely incompetent or totally delusional.
Guess I spoke a little too soon, as there was actually a third possibility: rampant fraud. Here's Bloomberg with the story:
The FBI raided the headquarters of Solyndra LLC, the solar-panel maker that failed after receiving $535 million in loan guarantees from the Obama administration.
Republican lawmakers said after the raid that the administration made misleading claims about the company’s prospects, and Democrats said the company’s chief executive officer withheld information on its financial plight.
The Energy Department gave the Fremont, California-based company the most federal backing awarded a solar manufacturer. One of the principal investors in Solyndra is a foundation headed by billionaire George Kaiser, a campaign supporter of President Barack Obama who made 16 visits to the president’s aides since 2009, according to White House visitor logs.
The Federal Bureau of Investigation executed a search warrant today with the Energy Department’s inspector general, bureau spokeswoman Julie Sohn said in an interview. Sohn said she couldn’t provide details about the investigation. Solyndra filed for bankruptcy protection on Sept. 6 with liabilities of $783.8 million, after shutting its factory and firing 1,100 people.
The raid's timing couldn't have been any more awkward for President Hopey-Changey, coming on the same day as his jobs speech in which he is widely expected to offer up a plan to throw more money around willy-nilly in a futile attempt to restart the broken American jobs machine. This story also has the potential to blow up into a major political scandal for Obama. Stay tuned.
Image: President Obama gives a speech during a visit to Solyndra, Inc., on May 26, 2010
It’s becoming pretty clear in the third year after the passage of Obama’s $700 billion economic stimulus plan that the massive tidal wave of borrowed taxpayer dollars failed to kick-start the real economy as it was intended to do. Among the many criticisms of the Recovery Act in peak oil circles was that many of the “shovel ready” projects were intended to build new roads and highways when the end of the cheap oil era will in the next few decades render the automobile as obsolete as the horse-and-buggy are today.
These critics argued that if we had to go even deeper into debt in this way, a better use of the money would be to fund alternative energy and transportation projects. Peak oil author and blogger James Kunstler’s preferred strategy, for example, was to invest in rebuilding high-speed (edited for accuracy, see comment section) the nation's rail service.
Similarly, solar power has been touted as a potential source of renewable energy by the environmentally minded since the 1970s. Every day, the sun bathes the Earth with enough energy to meet all of our needs, so the argument goes. If we could only find a way to harness that energy, we could have our cake (economic growth) and eat it, too (environmental sustainability).
The problem is that nobody has yet figured out how to collect the sun’s diffuse energy in a manner that is scalable enough to replace fossil fuel-fired electrical power plants. And this is where the magical thinking begins. Certainly, the reasoning goes, if we just throw enough money at the solar power industry, it will then be able to overcome the technical obstacles and lead us to a the promised land of clean, renewable electric power.
At least that is what the Obama administration and Congress must have been thinking in 2009 when they agreed to shower $535 million ($1 million for each Member of Congress, incidentally) upon Solyndra Inc, a company that makes solar modules. So how’s that project working out two years later? Not too well, actually. Here is Bloomberg.com with the details:
Solyndra Inc., a maker of solar modules that received a $535 million loan guarantee from the U.S. Energy Department, suspended operations and plans to file for bankruptcy, saying it couldn’t compete with larger rivals.
The closely held company will seek Chapter 11 protection, Fremont, California-based Solyndra said today in a statement. It didn’t say how much it owes to creditors.
Solyndra is the third U.S. solar manufacturer to fail in a month as falling panel prices and weak global demand are driving a wave of industry consolidation. President Obama visited Solyndra’s factory in May 2010 to promote investments in renewable energy and its closure will provide fuel to critics of his policies.
“Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers,” the company said in the statement. Its problems were exacerbated by a global glut of solar panels and slowing demand “that in part resulted from uncertainty in governmental incentive programs in Europe.”
Did you catch that? There’s a “global glut of solar panels.” And why would that be, especially at a time when energy prices have risen significantly? Perhaps because the panels don’t generate enough energy to make them worth the purchase cost? That must be it. Note the last line about the uncertainty of governmental incentive programs in Europe during this time of enforced budget austerity. Translated, that simply means that solar panels are unprofitable at current energy prices.
Here’s Bloomberg again:
Solyndra produces cylindrical panels that convert sunlight into electricity using copper-indium-gallium-diselenide thin- film technology. Standard solar panels are flat.
“Manufacturing and assembly costs associated with a Solyndra module aren’t particularly scalable,” Krop said.
There’s that dreaded word again, “scalable.” In fact, the solar panels produced by Solyndra were so UN-scalable that the company blew through over half-a-billion dollars in government-guaranteed loans in just over two years and STILL went bankrupt. To be that far off the mark with your business model, you have to be either completely incompetent or totally delusional.
One thing that always makes my eyes roll is hearing an American assert that the “market will sort things out.” The reason I find it amusing is that the people who say it are always willing to listen to the market until it tells them something they don’t want to hear. In such instances, they then do stupid things like giving $535 million in taxpayer money to a hopeless enterprise because they are wishing really hard for some technology to be developed that will save us from our current energy predicament.
Solar energy has it's uses, but it is NOT going to provide electricity in the massive quantities to which we have become accostomed. The failure of Solyndra, Inc. and two other solar energy firms just this past month alone means Mr. Market is trying to warn us that we need to start powering down voluntarily right now before reality does the job for us in its own brutally efficient manner.
