..but it would be a shame if companies with more resources and incentive for innovation and technological development were pushed out prematurely due to predatory subsidies.

As you’ve probably noticed, I don’t stick my opinion in on this story much, because i’m not really clear what the true situation is. (Think it’s similar over there on GTM — they’ve often just presented the sides without taking a side.) It’s hard to know for sure what the situation is, and where it will lead (compared to where we would go otherwise).

Think SEIA has taken a pretty wise approach to it all — hope they are working hard behind the scenes to try to be a moderator — but seems their approach has more or less pissed off the SolarWorld side.

We should end up with a reasonably large number of panel manufacturers, even if they are all Chinese.  And those companies will be in competition with each other.  (China is no longer socialistic, it’s state-involved capitalistic.)

The remaining companies will compete with each other, and with other energy generation technologies.  They will innovate in order to increase market share/profits.  

Getting your cost down pennies per watt means that you get to grab a larger part of the market.  

The ecology of our planet is the foundation of everything we do, including what we do under the heading of economy. When we damage our planet’s life-support system through inappropriate economic activities, we undercut the potential for economic activities in the future. For example, most of the food humans consume is grown in ways that deplete, poison or otherwise contaminate air, water and land alike. Organic agriculture causes much less life-support and human health damage than non-organic agriculture, but it’s still not completely sustainable.

Today, almost everything humans do causes life-support system harm. More precisely, it’s not so much about what we are doing, but about HOW we are doing it. The ways we support ourselves now depends on using up ever more non-renewable resources and using renewal resources in ways that make them difficult to renew. The result of this is over flowing landfills and evermore destruction of virgin land for raw materials to replace those buried in landfills.

“True-cost-pricing” is a free-market strategy aimed at integrating the principles of life-support sustainability with economically sound business practices. The basic idea is to include all the costs, cradle to cradle, of all products offered for sale in the common retail marketplace to pay for any damage those offerings cause from the procurement of raw materials, their refinement, product manufacture, product use, and their disposal. 

Currently, the public, through taxes, health costs, property damage, etc. pays the health, environmental and social costs associated with health and ecologically damaging products. By paying these costs, the public is caught in the ironic position of actually subsidizing the very products and processes that are harming them and their life-support system. Even worse, these subsidies retard the development of technologies that are more health and ecologically benign or even positive by artificially lowering the retail cost of ecological, health and socially damaging products, technologies, etc. With true-cost-pricing, these costs, would be included in the market price of all market offerings, In other words, the health and life-support-costs of product offerings would be determined by an independent body, (perhaps Consumer Report Magazine would be interested in this job) and these costs would be included in the retail price of every product being offered for sale. Of course, there would be no cost added to the cost of health and life-support benign products and services.

Including these costs up-front would cause the consumer price of health and life-support damaging products and services to rise, but even here we would save money over what we pay now because its always less expensive to avoid creating health and environmental problems than it is to cure sick people and heal damage to our common environment.

As technologies become more ecologically sophisticated there is no reason for commonly used products to be any more expensive to purchase than they are now. In fact, in spite of the subsidies supporting health and life-support damaging products, the market price of some “Green” product is already lower than harmful products they replace and they usually work better too.

But even if green products and technologies end up costing more at the point of purchase, under true-cost-pricing they would still be more cost effective to society. It’s less expensive to prevent ecological and social problems, than to fix them after they have been created.

An additional true-cost-pricing benefit would be the elimination of solid waste disposal. With true-cost-pricing everything sold in the marketplace would be designed to be reused, recycled or composted. When all costs are included, this is the most cost effective thing to do.

There is a general view that the free enterprise system is the antithesis of a healthy environment. With true-cost-pricing, however, free market forces can be powerful tools toward creating a secure life-support sustaining future.

This article is based on a concepts developed in detail in Chapter III of Achieving Eco-nomic Security On Spaceship Earth, published in 1995. The book is available free at http://www.jimbell.com, click on “Jim’s First Book” (on the left side of your screen.)

Had we waited for the “free market”/private money to develop solar panels we’d still be waiting and waiting long into the future.

The “free market” only shows up once short term profits are obvious.

New technologies are generally very expensive to get off the ground.  If you think private money/the “free market” innovates at the emergence level then list some examples.

Here’s a start:  Do not include intercontinental railroads, the electric grid, jet airplanes, computers, the internet, GPS, modern medicine, …. 

And yes, many innovative companies are being squeezed out of existence, a loss to the industry, investment and employment as a whole and the drive to lower costs and scale-up solar faster and farther…

Re R&D, I believe the quote regards German solar companies, not US…though you do mention one instance in Germany, QCells…

What you describe as an “alternate reality” is another aspect of the entire “reality,” and cause for optimism…

Yes, the US would be well-served by building out a modern, smart grid and continue supporting alternative, renewable energy…

And Congressmen, Schumer from NY for one, have proposed legislation including “Buy American” solar…

And that, along with taking China to task on predatory subsidies that are prohibited according to WTO rules, is what needs to be done to compete against “protectionist” and predatory rules and policies that exist in China…

All man-made inventions and systems are governed by rules and int’l trade, esp. in a globalized economy, should certainly not be an exception.

Let me pitch in another possible reality. The solar panel industry has matured to the point where a few efficient manufacturers have emerged and they are now cranking up their output which is putting the less efficient companies out of business.

This is something that is commonly seen in the growth of a technology. Look at all the computer and software companies which fell to the wayside as the most successful emerged. Remember all those search tools that weren’t Google?

A “level playing field” is a chimera with no basis in reality. Even if all government policies among all countries were the same, businesses with superior capabilities are going to “win”. Anyway, back in the 1970s-80s there was a similar situation in the U.S. – the U.S. was the hot market, and our activities therefore “subsided” the growth of many companies from other parts of the world similar to Europe and Germany. Sour markets are hurting every country in the game, and the protectionist backlash does little but further contribute to the myth that U.S. companies “can’t compete” due to regulations, subsidy, or “expensive” labor.

An alternate reality is that solar companies have rapidly met and exceeded world demand for solar p/v. The U.S. would be better served by encouraging more solar development for its 1 TW grid – and for god sake offer an incentive to purchase from companies which manufacture in the U.S. Note that I am not specifying that it be a U.S. company, but rather one that has seen fit to put Americans, and not robots or other countries, to work. Maybe we have to call that “domestic content”. It worked for the Chinese wind industry, it can work for us. While we are at it, we should be asking China to do more to develop its own domestic solar market, out of the 1 TW grid IT cannot build fast enough.

On the subject of R&D, Chinese companies have been allocating more funding to R&D for each year it can be observed. First Solar and Q-Cells have also outspent Chinese companies (2-3 to 1) every year and appear to spend a larger share of revenue on R&D. This is without mentioning the millions spent each year in the U.S. to aid in the development of the technology, and financing of world-class universities and research labs. If you have data to suggest otherwise, I would love to see it.

What is in fact most troublesome to me is that many innovative companies with fascinating technologies are the losers in this story – not those firms which are perfecting the reducing the costs of a technology invented 6 decades ago. Given the versatility of solar technologies, it would seem to be a shame that those companies will be stomped out now.

Now, if we’re talking only about solar panels, there’s only a small low skilled labor input to solar panels. In fact, total labor costs are only a very small percentage of the entire cost.  The labor difference between China and the US is being eaten away by shipping costs.

We should protect our manufacturers against predatory practices but simply manufacturing for less is not predatory.  It’s how we took the textile industry away from England.

I’d say Americans are approaching the living standard of the average urban Chinese than the converse.

Allowing predatory nationalist subsidies to dominate a global industry isn’t in Americans, Germans, or really anyone’s best interests…

Yes, thanks to SolarWorld and CASM and their US petition, these are finally being addressed…

A strong manufacturing base is a pillar of a healthy modern economy and needs to be protected from predatory policies and practices…

Global trade imbalances will even out as Chinese labor costs rise (as they already are doing) and as shipping costs rise (which is already happening).

Fair trade is being addressed with tariffs being placed on Chinese panels being sold for unrealistically low prices.

Another reason: the need to address imbalances in global trade and find a new balance that supports free, fair, open and equitable trade…

Yes, some people in Germany (and the US) are making less money.  At the same time some people in China are making more.

But the real message here is that solar panel prices are dropping like lead bloomers when the fleet hits port.  The price of producing electricity directly from sunlight is plummeting.  Cheap solar-electricity will force fossil fuels off the grid and help keep sequestered carbon sequestered.

I’m more concerned about climate change than about ‘local’ economics.  I really don’t care who gets rich out of getting us off of fossil fuels.  I just want someone to do it.