Silicon Valley’s Solar Innovators Retool to Catch Up to China

[jtuck004]

This supports why I think we need to be thinking about how to rebuild for the 22nd century - this century may be lost already...

(Sorry for the length, but we need to think about this. I say that because I think the people here are the ones that could help change things).

FREMONT, Calif. — A few years ago, Silicon Valley start-ups like Solyndra, Nanosolar and MiaSolé dreamed of transforming the economics of solar power...

<snip>

But as the companies finally begin mass production — Solyndra just flipped the switch on a $733 million factory here last month — they are finding that the economics of the industry have already been transformed, by the Chinese. Chinese manufacturers, heavily subsidized by their own government and relying on vast economies of scale, have helped send the price of conventional solar panels plunging and grabbed market share far more quickly than anyone anticipated...

<snip>

...during the year that Solyndra’s plant was under construction, competition from the Chinese helped drive the price of solar modules down 40 percent.

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After installing a 10-megawatt production line, in late 2008, Innovalight executives decided that, rather than compete with the Chinese, they would license the patented ink technology to them and avoid having to raise hundreds of millions of dollars to build factories of their own.

“How do you fight against enormous subsidies, low-interest loans, cheap labor and scale and a government strategy to make you No. 1 in solar?” said Conrad Burke, Innovalight’s chief. “Innovation will be the heart of the U.S. strategy, and although it might not create the same scale, we’re exporting well-protected technology to China and creating well-paying jobs here.”

The Chinese are spending hundreds of billions of dollars for alternative energies (mostly solar, some wind) and polysilicone, and billions more to bring water from one side of the country to the other. This is what it buys them. And before you get mad at the company that licensed their technology to the Chinese - what else could they do? Who is going to fund their money-losing manufacturing effort? Our companies, our workers, simply cannot compete in the environment we have built. It might be possible for people to create their own companies and, as employee-owners, keep their wages down enough to insure their own jobs, but eventually the money they pay to their workers is likely to wind up in another country. That's unsustainable.

What would it take to compete? Note that the first company in the article above raised $1 billion (in the online article). How puny is that compared to the Chinese effort? And that's just one industry. It would take numbers in the trillions to rebuild our manufacturing sector where it could compete in the world of today and tomorrow, and that leaves out labor. A conservative estimate of our unemployed by the BLS says we have about 15 million people unemployed, at least that many underemployed or too disheartened to continue to search for non-existent jobs with an unemployment rate of 17.1%. Some sites say the real totals are nearer 22%, which is closer to the other Depression's levels.

I am astounded that some are arguing that the 64K private sector jobs in September was anything but seriously deficient - with the jobs lost our net was MINUS 95,000. The growth was in mostly lower paying jobs. How deficient? We need about 125,000 jobs just to stay even, so to put just 10 million people back to work in five years we would need to start this month creating 300,000 private sector jobs every month. That has never been done in modern history. Ever. We may well be looking at over a decade before we see an unemployment rate near 8%. Which means there are people who have been laid off, people that are 50, that will never work another job in their life. We simply cannot survive as a country at that rate.

It would take a little over $500 billion, maybe $600 billion, to employ say, 10 million people at $30,000 a year, or $15 an hour. These people could be put to work rebuilding our factories for the 22nd century, doing some road and bridge work, creating a high speed train that goes from coast-to-coast (not buying the Chinese model, btw). We could teach them how to live in a globalized world and why to purchase American goods that help their economy. (This, btw, is a different strategy from tariffs on foreign goods. These worked to some extent in past decades, but may well boomerang on us in a globalized world. Our current strategies have already resulted in Mexico enacting tariffs against all manner of things American from food to Christmas trees, and China raising tariffs on Chicken and potentially stopping the shipments of rare metals by next year. Some say our mines will take as long as 10-15 years to get back into production - and we need that material). We get rid of the 15% and 28% capital gains and other loopholes - if you take your money out of the business, you pay taxes as if it were ordinary income. Because it is. And we put tariffs on the export of our industries, making it MUCH less profitable to steal them away in the night.

Manufacturing work would not only give people enough money to stimulate demand, it also stimulates spin-offs. People who work in manufacturing quite often start small side businesses because the work teaches them about needs in the work that are not being fulfilled. It would create thousands of new businesses.

And new business is what creates jobs, far more than existing big or small business.

This is a pile of money, but no more than we sent to Goldman Sachs (et al) to insure their bonuses. And we don't have to rebuild ALL of our industries, because others will benefit from this, but on our current path with the best job growth in home health care and services, the jobs that are leading to a new suburban poverty because the wages are not enough to live on, we are on a downward trajectory where the only question is how far down we will go. Maybe we are talking $6-10 trillion?

(Maybe George Soros just needs to buy enough politicians to make this happen. The sites which show their contributions could lead one to think they are swayed with relatively few dollars).

The austerity push, now being seen in England, would be a death knell for millions of people, and perhaps for our country, as people are laid off and the tax base decreases, only to see more people laid off.

We need to invest in our country.

[Confusious]

1. Nice post

To bad that very few in Washington have any foresight right now. Or just want to do anything to get back into power, even if it means flushing America down the toilet.