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

Germany's solar power plants don't produce power when the sun doesn't shine.

Via Instapundit: 

#GREENFAIL: Der Spiegel: Solar Subsidy Sinkole: Reevaluating Germany’s Blind Faith In The Sun. I’ve lived in Germany. They have faith in the sun because for most of the year it never actually appears . . . . No really. We went from November to May in Heidelberg and I think we saw the sun, like, once. So how can this possibly be a surprise?

Der Spiegel: Re-Evaluating Germany's Blind Faith in the Sun

A good place to begin the ridicule. Some ideas are so ridiculous that only a highly credentialed person would believe them.

"You can get a top job in the administration if you can make a good argument for why the government should borrow vast amounts to invest in companies that lose money."

Frank J. Fleming summarizing the argument made by Stephen Chu, Nobel Prize Winner, Secretary of Energy in the Obama administration and the guy who lost $500 million of your money in Solyndra.  It will also be his reason for losing billions more.

Government "Venture Capital" vs. Private Venture Capital

Megan McArdle writes in the Atlantic about the difference between government venture capital and private venture capital. By far the biggest difference is not even mentioned.

There is a dramatic and critical difference between government loan guarantees and private venture capital (PVC). The PVC investor expects to make a bundle from his investment, typically by getting an equity stake and cashing out when the successful firm goes public. That’s the best case scenario for PVC. If the company fails, they’re out their seed capital.

When the government gets into the venture capital business, risking your money and mine, what’s the payoff for the people whose capital is at risk? What, exactly do the taxpayers get in return for guaranteeing the loan? We know what they lose if the company fails, but exactly what is the payoff for the taxpayers if the company’s successful. Suppose Solyndra had been a success. The other investors would have make lots of money, the executives would have made lots of money and the banks would have made money. But what would the taxpayers have gotten in return for the risk they took?

Even the far-Left Think Progress admits that government venture capital is a designed lose, not make, money. The only argument is about the size of the loss for the taxpayer.

So the entire loan guarantee program is a designed money loser. Is there no possible payback to the public whose money is at risk? The only return on investment that is cited by supporters of loan guarantees is in the form of tax revenue generated by companies and employees. In other words, there is an assumption that the built-in billions of dollars of guaranteed losses to the taxpayer will, at some time in the future, be offset by property and income taxes if these ventures are successful.

That’s an incredibly weak argument and explains that the case being made by the Left for solar power development in the US is chauvinism: “We can’t let the Chinese get ahead of us in solar technology.” I outgrew that kind of argument is grade school.