Despite a doubling in demand for solar power cells (from 12 gigawatts in 2009 to 24 gw last year) and US government 
support for “green” jobs as the future economic engine, The Wall Street Journal (Aug.17,2011) headline bears the bad news : “Overrun by Chinese Rivals, U.S. Solar Company Falters”. Amid bruising competition across the globe, the green manufacturing jobs in the US are losing out in the cut-throat cost battle.
The Journal reports that Evergreen Solar, once the darling of the industry, filed for bankruptcy this week. Earlier this year, the firm closed its Massachusetts factory, a $450 million facility that opened in 2007 with state and local subsidies. Its 800 employees lost their jobs. Evergreen began making solar panels in Wuhan, China in 2010. Likewise, other US-based solar companies have already moved their production overseas: Sunpower went to the Philippines and First Solar to Malaysia.
“Quite frankly, as a solar manufacturer, it is better to pay workers $1 an hour in China than workers $15 an hour in Massachusetts”, says a solar analyst. Adds an industry exec, “Chinese solar manufacturers benefit from inexpensive capital, low-cost electricity and real estate, as well as less expensive labor”.
Another solar-products maker, California-based Solyndra, also announced plans in 2010 to shutter a plant and lay off the workers, just a year after receiving a $535 million federal loan guarantee. A big problem has been the plummeting of raw material costs (polysilicon has dropped from $400/kilo to $55 in the past 3 years). This stripped the competitive edge of firms like Evergreen and left them with a higher-cost production process.
Discussion questions:
1. Why are American manufacturers having trouble competing in the global solar energy market?
2. What are the dangers of state, local, and federal government incentive programs?