The solar industry in the US has been experiencing a noticable downturn after a few years of booming growth, forcing a number of major manufacturers to file for Chapter 11 bankruptcy. The demand for solar panels has been on the decline while the supply has drastically risen fueled by massive imports from China, causing a drop in panel prices that most US manufacturers cannot compete with, even with government support. Uni-Solar is yet another prominent domestic manufacturer of solar panels that had to file for bankruptcy. The company’s financial situation, subsequent worker layoffs and a recent cancellation of the bankruptcy auction offer a telling commentary on the general state of the solar industry in the US today. While there can be no doubt that the domestic solar industry is only in its infancy and it is normal for a new industry to experience growing pains, the reality is that the industry’s future depends as much on the natural adjustments of supply and demand as on its ability to effectively restructure its operations, and secure government and private funds.
Uni-Solar files for bankruptcy
Uni-Solar, manufacturer of makes thin-film solar products for commercial rooftops and metal roof integrated solar systems, filed for Chapter 11 bankruptcy protection on February 14, 2012. As the reason for bankruptcy the company sited that it has $263 million in debt notes due next year that it is unable to repay.
Uni-Solar is a subsidiary of a large US solar panel manufacturer Energy Conversion Devises, which also filed for bankruptcy in an effort to shed large debt loads. Over the past few years the company amassed debt and saw declining sales when European subsidies that helped boost demand for its products overseas were eliminated. Increased competition from less-expensive solar panels manufactured in China resulted in further sales and revenue declines. Immediately after Uni-Solar filed for bankruptcy, its stock price dropped from $1.46 at day’s end on Feb. 13 to 29 cents the next day. The company was delisted from the NASDAQ market and currently its shares are traded over the counter for about 5 cents a piece.
One of the strongest arguments of Obama’s administration in garnering support for solar subsidies has been that having a domestic solar industry will create more jobs and help alleviate the unemployment crisis. The string of bankruptcies and subsequent lay offs has drawn a lot of concerns and criticism regarding whether the solar industry is all that it has been promised to be in terms of job creation. While initial government subsidies did create jobs, bankrupt solar manufacturers have been forced to lay off workers in droves. Energy Conversion Devises made its first round of layoffs right before it filed for bankruptcy in February, letting go of 1,000 workers. In May, Uni-Solar layed off 300 more employees. In total the company currently has about 750 employees worldwide with two-thirds in Michigan and two idle plants in Greenville. The company intends to keep a small workforce to assist in the bankruptcy process and the sale of its assets.Additionally, some employees will be kept to work on developing the company’s solar technologies under government-funded contracts.
Given the current trends, many questions about whether having a domestic solar industry that will create jobs is feasible. Can US manufacturers restructure their operations in a way that will make them competitive with their Chinese counterparts? Can US companies that need to hire workers at comparatively high salaries, offer other benefits such as health insurance, adhere to appropriate environmental standards and labor laws, compete with the Chinese who can afford to pay their workers pennies, while forcing them to work in inhumane conditions? Is it likely that the US solar industry will make a move that has proven to be so effective for other industries in the last decade- move the production offshore to be able to compete effectively with Asian manufacturers? Is this a fair trade-off to US workers? Or is it more important for US companies to stake their claim in the solar industry, reduce our dependence on foreign oil and offer solar panels and low prices, even if it is at the expense of solar manufacturing jobs in the US?
It is important to note that while jobs in the manufacturing sector of the solar industry are dwindling, solar panel installation companies are continuing to expand and hire workers, benefiting from the significant decrease in solar panel prices. For example, in California the solar market is growing 40% annually. David Hochschild, Vice President, External Relations for Solaria, and Co-Founder of the Vote Solar Initiative states, ” California’s solar industry is one of the few bright spots amidst all of the gloomy economic news in our state. The clean energy industry is supplying our state with more than 35,000 high-paying jobs and positioning us at the front of the line for private investment dollars” (http://s.tt/1c8lC) Currently, overall more than 100,000 people are employed by the solar industry across the US, and it is in our nation’s best interest to continue developing our solar industry so that these numbers keep growing.
Should the solar industry continue to get public funding?
The tax breaks and incentives that were instituted a number of years ago by the Obama administration that greatly helped boost the growth of US solar industry are due to expire soon. Solar companies are insisting that it is essential for Congress to approve a new round of subsidies and tax breaks, while Congress itself remains polarized as to the real value and necessity of these investments. Recent bankruptcies of solar companies both in Europe and the US, as well as waning government support in Europe, make many lawmakers wary of pouring more money into a troubled industry. However, it seems that in making this decision our government must not only consider the immediate benefits of financial returns and projected job creation, but also keep in mind the long term purpose of the existence of the solar industry and other clean renewable energy in the first place, which has always been to protect our environment. The financial investments into clean energy we make now will have major impact on the future survival of our planet, and failing to see this larger perspective is not only nearsighted by also dangerous.
Levchik (Leo) is a renewable energy activist from Boston, MA, and has been involved with alternative energy and green construction since 2004.
In 2009, Leo and his green roofing company (CoolFlatRoof.com) sponsored Boston’s Solar Decathlon Team, providing materials and installation labor to install a cool white roof on the top of Curio home (Joint effort by Tufts University and Boston Architecture College) – more info about the project here.
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