In the last part of the 19th Century, Standard Oil of New Jersey sought to monopolize the petroleum industry. One of its tactics was to put a company-owned fuel station in a town or small city and sell product at less than cost until all competitors were driven out of business. Then they would raise prices to recoup their losses and make big profits.
Potential competitors would not open fuel stations in that community for fear of being treated the same way again.
In the arena of solar panels, the U.S. just fell victim to the a similar tactic. China is a major manufacturer of solar panels, as well as wind turbines, and wants to dominate the market. A combination of circumstances, including a drop in the cost of silicon, low labor costs and government investment enabled China Inc. to dominate the solar panel business and drive many American solar panel start-ups into bankruptcy. The most famous of these was Solyndra, with half a billion of U.S. government investment going up in smoke.
Solyndra bet on the new thin film technology, which lost its competitive edge when the price of silicon dropped. But others fell as well, including United Solar Ovionics, a Michigan green energy company with both Democratic and Republican sponsors in Congress.
The government money spent on all these green energy companies is chump change compared to the tens of billions of government money and tax subsidies spent on oil, coal and nuclear industries.
The bottom line is if the U.S. is to stop China from dominating the world market in green energy, a real investment with staying power will need to be made. The energy subsidies given to homeowners for green energy investments and credits for energy efficient appliances and vehicles need to be aimed toward American-made products. We are at war with China, an economic war true enough, but nevertheless a war.
An energy investment comparable in scale and government involvement to the Tennessee Valley Authority is needed for the 21st century.
Currently we make only 10 percent of the world's supply of solar panels, and some U.S. manufacturers are moving production overseas. In the wind turbine arena the problem is made worse by the cheaper Chinese components for wind turbines. Until there is a guaranteed market for these components when produced locally, the Chinese will win again. The start-and-stop subsidies for green power need to become long term guarantees, and they should be furnished based on the percentage of U.S. components and labor in each device.
China is not invincible. In its domestic wind turbine effort China allowed poor quality control in manufacturing and cut-throat price wars among component manufacturers. This in turn caused their domestic usage to be tarnished by accidents and failures. Their power grid construction has not kept up with the needs of their wind farms. Ironically enough, it was lack of government planning, oversight and standards that handicapped their effort, a lesson for us in this country.