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It would be more accurate to state that Germany's manufacturers of solar panels are imploding due to the large volume of lower cost panels produced in China whi

by smackay 13y ago

It would be more accurate to state that Germany's manufacturers of solar panels are imploding due to the large volume of lower cost panels produced in China which are flooding (allegedly being dumped in) the market. There is a two-way battle between the installation and service companies that use panels manufactured in the EU and other installation and service companies which use Chinese panels and equipment. The former claims potential job losses of 25,000 but the latter claim that over 70,000 jobs are also at risk in Germany and many thousands more across the EU if tariffs are imposed. The media appear to be presenting this as a clear-cut issue of dumping to destroy European jobs but the reality is far from it. The BBC seems to be one of the better sources for dis-entangling the various points of view, http://www.bbc.co.uk/news/business-22766639 http://www.bbc.co.uk/news/business-22766639, but the coverage does appear to favour the anti-dumping suits.

mtgx 13y ago
I think I heard the government was also cutting their subsidies? Is that true? I don't think most subsidies are good, but sometimes they could be needed if you want the future to look a certain way, and I don't think it's right to cut the subsidies of the solar industry after just a few short years, when the oil industry has been getting subsidies for almost a century, and keeps getting them (this goes for most countries).
- brazzy 13y ago
  The problem is that the German subsidies to solar power are extremely high, have the form of price guarantees (i.e. their total amount is unlimited!) and are paid for by private consumers via their electricity bill - and have reached already reached the level where they're a noticeable drain on the funds of poorer households.
justincormack 13y ago
Indeed. Businesses involved in something that falls rapidly in price tend to have these type of issues, and also tend to complain and get government support a lot. Managing a business with fast falling prices is different from one where they gradually rise. In other news, Germany reached 23.9GW of peak solar power output a few days back, around 40% of consumption http://cleantechnica.com/2013/07/07/breaking-germany-sets-solar-power-record-again-23-9-gw/ http://cleantechnica.com/2013/07/07/breaking-germany-sets-so...
- seren 13y ago
  This is a case where, even if the businesses are failing, the mid to long term outcome will benefit Germany anyway.
  - gngeal 13y ago
    the mid to long term outcome will benefit the whole world anyway Here, fixed that for you. (Pilot projects on a large scale are useful to all of us. Someone has to finally do it.)
    - kaybe 13y ago
      True, and I'm fine with paying for that (I'm German). It's better than just having world summits that end in disagreement. Let's build amazing green technology, invest and then profit some from adaption and then see the real goal come true when everyone starts to make it. It might kill some companies in the end, but there's so much more at stake here.
      - PavlovsCat 13y ago
        A man has made at least a start on discovering the meaning of human life when he plants shade trees under which he knows full well he will never sit. -- D. Elton Trueblood
  - drchaos 13y ago
    How exactly do you think Germany (as a whole) could profit from this? With the EEG (Energie-Einspeise-Gesetz), the German government created an artificial solar bubble which is costing electricity customers several billions of Euros each year, only to fill the pockets of (mostly Chinese) panel producers, homeowners and companies who install that stuff, and last but not least the banks (most installations are financed by credit). The amount of electricity actually produced is almost neglible (a meager 3.1% in 2011), whereas the consumer price has almost doubled since 2005, and is now one of the highest in the world. Even if you assume that this giant experiment in planned economy would somehow lead to technological breakthroughs, making producing electricity via solar economically feasible in the long term, Germany would still have to recover the cost of 20+ years of subventions (which already amount to over 100 billion €, and that's only a fraction of the total sum which has been guaranteed by the EEG), while other countries with much better climatic conditions would be able to reap the majority of the profits.
ckozlowski 13y ago
It's a troublesome issue for China as well. China's companies are often state controlled. (if not outright owned, then the government controls a commanding stake) With an intense focus on keeping employment high, they are lothe to cut production in any way that would see to a lost of jobs. So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price, (mind you, this lowers the profit they can obtain per-panel as well) but if they scale back to keep the demand higher, they'll need to cut factory shifts, which means letting go of workers (and dealing with the instability that follows) The State's interest is in maintaining stability in society above all else, even in the face of sound economic sense. Unfortunately for all involved, this is not terribly sustainable. One of those shoes will drop eventually. Manufacturing in China is starting to suffer noticeably despite their best efforts to dress it up. Either the economy is allowed to liberalize and adjust normally (as it does in western countries), or it breaks down. Both scenarios would bring a critical eye to the Party.
- _pmf_ 13y ago
  > They know if they continue to produce, they'll flood the market and depress the price When has this ever stopped anyone?
  - justincormack 13y ago
    When they go bankrupt. Or a bit of price collusion, or a cartel (OPEC for an example).
    - ExpiredLink 13y ago
      "Chinese Solar Panel Giant Is Tainted by Bankruptcy" http://www.nytimes.com/2013/03/21/business/energy-environment/chinese-solar-companys-operating-unit-declares-bankruptcy.html?pagewanted=all http://www.nytimes.com/2013/03/21/business/energy-environmen...
- berntb 13y ago
  >>So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price They only need to depress the prices until they kill off the non-Chinese competition, then they have a money earning business. After that, repeat the procedure for the next industry... (This is the standard business model of monopolies. I believe a classic example are big bakery chains which enter an area and kills off the local small bakeries with low prices, then they raise the prices above the prices of the now-gone bakeries, to finance taking over the next area.)
Osmium 13y ago
> large volume of lower cost panels produced in China which are flooding (allegedly being dumped in) the market Would it be illegal for these German companies to just buy up all the panels as they enter the market, to resell later? If the suggestion is that the panels are being sold at below-cost in order to crush competition, then it can't be sustainable.
- cdash 13y ago
  Company vs nation, who wins?
- rogerbinns 13y ago
  It should be a free market. Assuming there is actual "dumping", then look at it as the Chinese are deliberately making themselves poorer in order for the Germans buying the panels to keep more of their own money. The Germans are the ones better off, and the Chinese are worse off! The usual mumbling is then about it being a move to remove other's production capacity, and somehow in the future reap oversized profits. The technology moves fast enough to make that less likely, and reaping oversized profits means new entrants can come in to get regular profits so preventing the oversized profits. Free markets are generally self correcting to match supply and demand. The people distorting them are usually the ones who end up worse off.
  - toyg 13y ago
    There's also an issue of quality control and environmental impact: we know that technology manufactured in the EU will, in most cases, satisfy a number of very stringent tests aimed at guaranteeing the wellbeing of workers and consumers, and at maintaining low pollution levels. Despite recent changes in policy, this cannot be said with certainty for most items produced in China. I don't see why prices shouldn't be artificially corrected to reflect that.
    - tjansen 13y ago
      Because if you impose tariffs on such goods, these countries will never be able to improve their standard of living. The lower standards give them a chance to produce for lower prices and thus participate in the global market. If you look at Asia, even though things are not perfect today, their standard of living is continously improving. Sooner or later they will catch up, even if it takes some more decades. And, who knows, maybe one day they even offer significantly better standards than the western countries. If that happens, would you think that it would be ok for them to impose tariffs on western goods or stop importing from western countries until we somehow find a way to catch up?

by smackay 13y ago

mtgx 13y ago

I think I heard the government was also cutting their subsidies? Is that true? I don't think most subsidies are good, but sometimes they could be needed if you want the future to look a certain way, and I don't think it's right to cut the subsidies of the solar industry after just a few short years, when the oil industry has been getting subsidies for almost a century, and keeps getting them (this goes for most countries).

brazzy 13y ago
The problem is that the German subsidies to solar power are extremely high, have the form of price guarantees (i.e. their total amount is unlimited!) and are paid for by private consumers via their electricity bill - and have reached already reached the level where they're a noticeable drain on the funds of poorer households.

justincormack 13y ago

Indeed. Businesses involved in something that falls rapidly in price tend to have these type of issues, and also tend to complain and get government support a lot. Managing a business with fast falling prices is different from one where they gradually rise. In other news, Germany reached 23.9GW of peak solar power output a few days back, around 40% of consumption http://cleantechnica.com/2013/07/07/breaking-germany-sets-solar-power-record-again-23-9-gw/ http://cleantechnica.com/2013/07/07/breaking-germany-sets-so...

seren 13y ago
This is a case where, even if the businesses are failing, the mid to long term outcome will benefit Germany anyway.
- gngeal 13y ago
  the mid to long term outcome will benefit the whole world anyway Here, fixed that for you. (Pilot projects on a large scale are useful to all of us. Someone has to finally do it.)
  - kaybe 13y ago
    True, and I'm fine with paying for that (I'm German). It's better than just having world summits that end in disagreement. Let's build amazing green technology, invest and then profit some from adaption and then see the real goal come true when everyone starts to make it. It might kill some companies in the end, but there's so much more at stake here.
    - PavlovsCat 13y ago
      A man has made at least a start on discovering the meaning of human life when he plants shade trees under which he knows full well he will never sit. -- D. Elton Trueblood
- drchaos 13y ago
  How exactly do you think Germany (as a whole) could profit from this? With the EEG (Energie-Einspeise-Gesetz), the German government created an artificial solar bubble which is costing electricity customers several billions of Euros each year, only to fill the pockets of (mostly Chinese) panel producers, homeowners and companies who install that stuff, and last but not least the banks (most installations are financed by credit). The amount of electricity actually produced is almost neglible (a meager 3.1% in 2011), whereas the consumer price has almost doubled since 2005, and is now one of the highest in the world. Even if you assume that this giant experiment in planned economy would somehow lead to technological breakthroughs, making producing electricity via solar economically feasible in the long term, Germany would still have to recover the cost of 20+ years of subventions (which already amount to over 100 billion €, and that's only a fraction of the total sum which has been guaranteed by the EEG), while other countries with much better climatic conditions would be able to reap the majority of the profits.

ckozlowski 13y ago

It's a troublesome issue for China as well. China's companies are often state controlled. (if not outright owned, then the government controls a commanding stake) With an intense focus on keeping employment high, they are lothe to cut production in any way that would see to a lost of jobs. So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price, (mind you, this lowers the profit they can obtain per-panel as well) but if they scale back to keep the demand higher, they'll need to cut factory shifts, which means letting go of workers (and dealing with the instability that follows) The State's interest is in maintaining stability in society above all else, even in the face of sound economic sense. Unfortunately for all involved, this is not terribly sustainable. One of those shoes will drop eventually. Manufacturing in China is starting to suffer noticeably despite their best efforts to dress it up. Either the economy is allowed to liberalize and adjust normally (as it does in western countries), or it breaks down. Both scenarios would bring a critical eye to the Party.

_pmf_ 13y ago
> They know if they continue to produce, they'll flood the market and depress the price When has this ever stopped anyone?
- justincormack 13y ago
  When they go bankrupt. Or a bit of price collusion, or a cartel (OPEC for an example).
  - ExpiredLink 13y ago
    "Chinese Solar Panel Giant Is Tainted by Bankruptcy" http://www.nytimes.com/2013/03/21/business/energy-environment/chinese-solar-companys-operating-unit-declares-bankruptcy.html?pagewanted=all http://www.nytimes.com/2013/03/21/business/energy-environmen...
berntb 13y ago
>>So they're in a catch of their own: They know if they continue to produce, they'll flood the market and depress the price They only need to depress the prices until they kill off the non-Chinese competition, then they have a money earning business. After that, repeat the procedure for the next industry... (This is the standard business model of monopolies. I believe a classic example are big bakery chains which enter an area and kills off the local small bakeries with low prices, then they raise the prices above the prices of the now-gone bakeries, to finance taking over the next area.)

Osmium 13y ago

> large volume of lower cost panels produced in China which are flooding (allegedly being dumped in) the market Would it be illegal for these German companies to just buy up all the panels as they enter the market, to resell later? If the suggestion is that the panels are being sold at below-cost in order to crush competition, then it can't be sustainable.

cdash 13y ago
Company vs nation, who wins?
rogerbinns 13y ago
It should be a free market. Assuming there is actual "dumping", then look at it as the Chinese are deliberately making themselves poorer in order for the Germans buying the panels to keep more of their own money. The Germans are the ones better off, and the Chinese are worse off! The usual mumbling is then about it being a move to remove other's production capacity, and somehow in the future reap oversized profits. The technology moves fast enough to make that less likely, and reaping oversized profits means new entrants can come in to get regular profits so preventing the oversized profits. Free markets are generally self correcting to match supply and demand. The people distorting them are usually the ones who end up worse off.
- toyg 13y ago
  There's also an issue of quality control and environmental impact: we know that technology manufactured in the EU will, in most cases, satisfy a number of very stringent tests aimed at guaranteeing the wellbeing of workers and consumers, and at maintaining low pollution levels. Despite recent changes in policy, this cannot be said with certainty for most items produced in China. I don't see why prices shouldn't be artificially corrected to reflect that.
  - tjansen 13y ago
    Because if you impose tariffs on such goods, these countries will never be able to improve their standard of living. The lower standards give them a chance to produce for lower prices and thus participate in the global market. If you look at Asia, even though things are not perfect today, their standard of living is continously improving. Sooner or later they will catch up, even if it takes some more decades. And, who knows, maybe one day they even offer significantly better standards than the western countries. If that happens, would you think that it would be ok for them to impose tariffs on western goods or stop importing from western countries until we somehow find a way to catch up?