Economics, Energy and the Environment

Germany’s renewabubble is popping along

According to Spiegel Online:

The German solar industry is at a turning point. The bankruptcy of Q-Cells this week shows that the days of German solar cell production are numbered. Asian competitors took the lead years ago, and German government subsidies were part of the problem.

It seems that the whole “subsidize green tech and capture the markets of tomorrow” thing isn’t working out so well with the early adopters:

…Q-Cells’ insolvency also comes as a great shock to Germany’s solar industry. It is already the fourth major bankruptcy in a sector in crisis, and it underscores the degree to which German solar firms are being outpaced by competition from Asia — despite billions in German government subsidies granted each year to the industry. And despite solar energy gradually becoming more competitive, the setbacks are rapidly mounting.

I’m not sure why it’s a shock when it’s the fourth bankruptcy in a row (I call that a trend, not a surprise), but here’s the best part: the Chinese used “clean energy” subsidies from Germany to undercut Germany’ solar-cell manufacturers:

In technological terms, solar cells are relatively easy to copy and manufacture, and Germany, with its comparably expensive labor market, is no longer the place to produce them. Much of the manufacturing of solar cells in Germany is already automated, but it is still considerably cheaper to operate a factory in a country like China, where costs are lower for everything from factory construction to paying the cleaning crew. In addition, Beijing has made the solar sector a priority and the government is providing many manufacturers with loans at highly favorable interest rates. Even worse, the German government has also directly and indirectly subsidized Chinese solar companies to the tune of €100 million as part of development aid efforts aimed at promoting China’s green industries.

And the renewabubbles go pop pop pop.

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