Dark clouds gather over China's once-booming solar industry

China's push into solar energy was supposed to be a proud example of how the country was advancing into hi-tech manufacturing. But now the whole sector is on the brink of bankruptcy. The vaunted Chinese solar industry is in a state of collapse. The reasons are so simple even a child can understand them, but it would have to be a child who can do math. That leaves Obama out in the cold.

Forget about little facts like the fact that there are times every day … long hours … when the earth gets in the way of the sun. That time is called night. Forget that during the time that the sun is blocked, there is no good way of storing the power that has been generated during the day. But here’s where the math comes in.

Point number one: solar power is not cost competitive with fossil fuel power. Point number two, see point number one. Point number three, see points one and two.

Stupid people who consider other people’s money “play money” are in the process of flushing gigantic sums of money away in an industry that has the financial future of the Pyramids of Egypt.

Dark clouds gather over China's once-booming solar industry China's push into solar energy was supposed to be a proud example of how the country was advancing into hi-tech manufacturing. But now the whole sector is on the brink of bankruptcy.

Solar power, along with biotechnology and aerospace, was declared a "strategic emerging industry" and was given grants and low-cost loans. Two years ago, LDK Solar, one of China's largest solar panel makers, built a new, state-of-the-art factory in the central city of Hefei.

It sits in one of the city's industrial parks, a big LDK Solar logo on its wall, with the New York-listed company's slogan underneath: "Lighting the Future".

"It cost 2.5 billion yuan (£250m) to build, the majority of the equipment was imported from Germany, and it hired 5,000 staff," said Jie Xiaoming, a 30-year-old who works at the plant's quality control and packaging department.

Last month, however, 4,500 of the staff were put on gardening leave. They receive 700 yuan a month to stay at home. The factory has shut down 24 of its 32 production lines.

"There do not seem to be any orders. People are still turning up for work, but mostly just sleeping. The management has not said much, just that the United States has a new policy that is stopping our exports," said Mr Jie.

If you have ever bough any of those solar powered night lights that you can place around your yard you learn that after a few months, or at most a few years, the solar panels simply give up.  That’s one of the things that the “greenies” have not had to face since the industry is brand new.  Replacing those acres and acres of panels every few years will make the ratepayer nostalgic for a wood stove.

H/T Kate at Small Dead Animals