"Invented here, sold there."
The United States created the solar cell industry and literally launched it into space 50 years ago. And, yes, solar PV is going to be one of the largest job-creating industries of the century, projected to grow “from a $20 billion industry in 2007 to $74 billion by 2017.”
But while conservatives work hard to kill the clean air, clean water, clean energy jobs bill that is America’s only real hope of remaining globally competitive, the rest of the world eats our lunch, a lunch we were kind enough to cook for them using on our own no-longer-secret recipe. As Tom Friedman explains:
Applied Materials is one of the most important U.S. companies you’ve probably never heard of. It makes the machines that make the microchips that go inside your computer. The chip business, though, is volatile, so in 2004 Mike Splinter, Applied Materials’s C.E.O., decided to add a new business line to take advantage of the company’s nanotechnology capabilities “” making the machines that make solar panels. The other day, Splinter gave me a tour of the company’s Silicon Valley facility, culminating with a visit to its “war room,” where Applied maintains a real-time global interaction with all 14 solar panel factories it’s built around the world in the last two years. I could only laugh because crying would have been too embarrassing.
Not a single one is in America.
Let’s see: five are in Germany, four are in China, one is in Spain, one is in India, one is in Italy, one is in Taiwan and one is even in Abu Dhabi. I suggested a new company motto for Applied Materials’s solar business: “Invented here, sold there.”
As the National Renewable Energy Laboratory documents, “From 1980 to 1985, the U.S. industry dominated the world market contributing 50% or more of world production.” But then President Reagan gutted Jimmy Carter’s renewable energy program (see “Who got us in this energy mess? Start with Ronald Reagan“). President Clinton began to increase federal efforts and incentives, so our market share began to increase. Then the Gingrich Congress started to roll back Clinton programs, especially those aimed at clean energy deployment or those aimed at increasing the competitiveness of US solar manufacturers. Finally, the Cheney-Bush administration came in and started a major effort to gut all clean energy deployment programs, just as our competitors were seriously ramping up their efforts.
And so our market share in solar has plummeted in the past decade, as the NREL figure below makes all too painfully clear:
But don’t get all friggin’ sentimental on me. Think of the few billion dollars U.S. taxpayers saved that went to cut taxes on the wealthiest 1%.
The fundamental tenets of conservative ideology say that if countries like China and Taiwan and Spain make most of the PV cells, it must be because they have an inherent “comparative” advantage over us. You gotta start reading your Ricardo, people.
Any card-carrying conservative knows that if other countries manage to get millions of their workers’ hands dirty actually making stuff, it’s only because they are better at it. We’re still the brainiacs who invent the technologies first and then wisely save a few pennies of the taxpayer dollars not promoting American technologies into billion-dollar American industries. We’ve still got all those Internet-related jobs, and it’s not like the government had anything to do with that.
So please, all you progressives and enviros out there, stop your whining. The plan is unfolding as it should, indeed as it must. Do not argue with the invisible hand. People will think you’re crazy.
Sure those thin films look cool. They seem like something that could generate a lot of jobs for a high-tech, high wage economy.
More seriously, it will be interesting to see whether significant incentives and real requirements for renewable energy at a national level can restore some semblance of US leadership (see EIA projects wind at 5% of U.S. electricity in 2012, all renewables at 14%, thanks to Obama stimulus). But for a sustained revival we need to pass the climate and clean energy bill, since it is the only way to bring a steadily rising carbon price and massive state and federal clean energy funding — as I (and Friedman) argued last week. Returning to Friedman’s new piece:
The reason that all these other countries are building solar-panel industries today is because most of their governments have put in place the three prerequisites for growing a renewable energy industry: 1) any business or homeowner can generate solar energy; 2) if they decide to do so, the power utility has to connect them to the grid; and 3) the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop.
Regulatory, price and connectivity certainty, that is what Germany put in place, and that explains why Germany now generates almost half the solar power in the world today and, as a byproduct, is making itself the world-center for solar research, engineering, manufacturing and installation. With more than 50,000 new jobs, the renewable energy industry in Germany is now second only to its auto industry. One thing that has never existed in America “” with our fragmented, stop-start solar subsidies “” is certainty of price, connectivity and regulation on a national basis.
That is why, although consumer demand for solar power has incrementally increased here, it has not been enough for anyone to have Applied Materials “” the world’s biggest solar equipment manufacturer “” build them a new factory in America yet. So, right now, our federal and state subsidies for installing solar systems are largely paying for the cost of importing solar panels made in China, by Chinese workers, using hi-tech manufacturing equipment invented in America.
Have a nice day.
“About 95 percent of our solar business is outside the U.S.,” said Splinter. “Our biggest U.S. customer is a German-owned company in Oregon. We sell them pieces of equipment.”
If you read some of the anti-green commentary today, you’ll often see sneering references to “green jobs.” The phrase is usually in quotation marks as if it is some kind of liberal fantasy or closet welfare program (and as if coal, oil and nuclear don’t get all kinds of subsidies). Nonsense. In 2008, more silicon was consumed globally making solar panels than microchips, said Splinter.
“We are seeing the industrialization of the solar business,” he added. “In the last 12 months, it has brought us $1.3 billion in revenues. It is hard to build a billion-dollar business.”
Applied sells its solar-panel factories for $200 million each. Solar panels can be made from many different semiconductors, including thin film coated onto glass with nanotechnology and from crystalline silicon. At Applied, making these complex machines requires America’s best, high-paid talent “” people who can work at the intersection of chemistry, physics and nanotechnology.
If we want to launch a solar industry here, big-time, we need to offer the kind of long-term certainty that Germany does or impose the national requirement on our utilities to generate solar power as China does or have the government build giant solar farms, the way it built the Hoover Dam, and sell the electricity.
China … no longer believes it can pollute its way to prosperity because it would choke to death. That is the most important shift in the world in the last 18 months. China has decided that clean-tech is going to be the next great global industry and is now creating a massive domestic market for solar and wind, which will give it a great export platform.
In October, Applied will be opening the world’s largest solar research center “” in Xian, China. Gotta go where the customers are. So, if you like importing oil from Saudi Arabia, you’re going to love importing solar panels from China.
Well, conservatives must love importing oil from Saudi Arabia, since they’ve blocked every effort to promote efficiency and alternatives, so I guess they will love importing solar panels.
The rest of us need to fight for the clean energy jobs bill.