Through the centuries, scientists have found innovative ways to harness the power of the sun — from magnifying glasses to steam engines. Converting more solar power into electricity is high on the political agenda in many countries, amid the push to find domestic energy sources that are less polluting than fossil fuels.
Solar is growing quickly in the United States.
Assisted by technological innovation and years of government subsidies, the cost of solar power — and wind power — has fallen sharply, so much so that the two industries say that they can sometimes deliver cleaner electricity at prices competitive with power made from fossil fuels.
At the same time, solar and wind power companies are telling Congress that they cannot be truly competitive and keep creating jobs without a few more years of government support.
The growth of solar power was helped by a federal stimulus package that extended a tax credit and provided other investment incentives for the industry. A one-year extension of the 1603 tax-grant program is expected to create an additional 37,000 solar industry jobs in 2012, according to a report by EuPD Research.
But the lobbying by the wind and solar industries comes at a time when there is little enthusiasm for alternative-energy subsidies in Washington.
Overall concerns about the deficit are making lawmakers more skeptical about any new tax breaks for business in general. And taxpayer losses of more than half a billion dollars on Solyndra, a bankrupt maker of solar modules that defaulted on a federal loan, has tarnished the image of renewable power in particular. Solyndra was financed under a now-expired program, part of the 2009stimulus package, that provided government loan guarantees for clean-energy projects, some of which administration officials expected to be risky.
But solar and wind companies argue that the tax breaks they are seeking are different. The tax credits can be taken only by businesses that are already up and running, so taxpayers are less likely to be stuck subsidizing a failing company, proponents say.
Without the new breaks, industry executives warn, they will be forced to scale back production and eliminate jobs in a still-weak economy.
Glut of Solar Panels is a New Test for China
China in recent years established global dominance in renewable energy, its solar panel and wind turbine factories forcing many foreign rivals out of business and its policy makers hailed by environmentalists around the world as visionaries.
But now China’s strategy is in disarray. Though worldwide demand for solar panels and wind turbines has grown rapidly over the last five years, China’s manufacturing capacity has soared even faster,creating enormous oversupply and a ferocious price war.
A Volley of Trade Cases
The solar panel manufacturing industry in the United States and Europe has begun a volley of trade cases against imports, following the same track as the steel industry before it — and for many of the same reasons.
The U.S. Commerce Department issued a final ruling on Oct. 10, 2012, that would impose tariffs of 24 percent to 36 percent on solar panels imported from China. The department concluded, despite China’s denials, that Chinese manufacturers had received government subsidies and had “dumped” solar panels on the U.S. market for less than it cost to manufacture and ship them.
Solar panel manufacturers in the United States are now lobbying the Obama administration to broaden the tariffs to include solar panels made partly in China and partly in other locations, notably Taiwan. And the American industry is not ruling out further trade cases against other Asian solar panel exporters.
In Brussels, the European Union has started a trade investigation into solar panel imports from China — the world’s largest case ever involving allegations of dumping, covering imports worth $26.5 billion last year. And the European industry is seeking a second case against Chinese solar panel exports, accusing them of benefiting from government subsidies.
The tariffs imposed by the U.S. cover about $3 billion a year in imported solar panels and were imposed after a quasi-judicial process at the Commerce Department. U.S. law does not allow the White House to intervene in the process of calculating duties. But the duties can be replaced with a negotiated settlement that also satisfies the domestic industry.
How Solar Power Works
There are several ways to use the sun’s power to generate electricity. One of the most promising is called concentrating solar power. This involves using mirrors to reflect and focus the sun’s rays, providing heat, which in turn helps power a generator. Another is photovoltaic panels, such as the displays on the rooftops of homes and office buildings (some of these displays, especially in California, have experienced problems with theft).
Solar energy is also used to heat water and pools — and of course a properly designed house will optimize the light and heat qualities of as it floods through the windows.
Making a solar panel, also known as a solar module, requires four main steps. The first is to use molten polysilicon to grow crystals or cast blocks of polycrystalline silicon. The second step is cutting and polishing the material into thin, smooth wafers.
The next step involves chemically treating the wafer and adding electrical contacts to turn it into a solar cell. The last step involves connecting 60 or 72 solar cells together, covering them with glass, enclosing them in an aluminum frame and adding an electrical junction box.
The Solyndra Scandal
Even with government support, American companies have a hard time competing with foreign producers. In August 2011, three U.S. solar power companies — Solyndra of California, Evergreen Solar of Massachusetts and SpectraWatt of New York — all filed for bankruptcy. In the case of Solyndra, the company had received $527 million in loans from the federal government.
On Sept. 13, 2011, a House subcommittee released documents suggesting that a final review of the $527 million in loan guarantees for Solyndra may have been rushed so that Vice President Joseph R. Biden Jr. could announce its approval at a groundbreaking.
But at a subcommittee hearing, officials of the Energy Department’s loan office and the White House budget office defended their decisions, which they said were carefully reviewed and not politically inspired.
The collapse of the Solyndra deal turned what was once portrayed by some as a shining example of the promise of federal subsidies to stimulate economic growth through green jobs into a grim lesson in what others call the futility of federal meddling in the marketplace.
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