Solar energy has made many leaps and bounds in the last 25 years since its inception. The measure of efficiency for solar panels is usually cost-per-watt generated. Ironically enough, it started about 25 years ago at 25$ a watt—which was incredibly inefficient. This changed to 10$ in 1990, 5$ in 2000, and is projected to be about 1$ a watt here in 2012. But with all the advancements in solar panels, why are so many companies going under? The most infamous example is Solyndra, failing after receiving millions in controversial Federal loans. Then there is today’s example which motivated this article:
Energy Conversion Devices, based out of Auburn Hills, is filling Chapter 11 as of today!
Now, this idea that the American people don’t want solar energy is simply not true. According to several statistics, surveys, you name it, people flat out prefer the idea of renewable FREE energy that will make them independent from the electric companies. When the car industries were failing, no one was saying nobody wanted cars, and that they are an ill investment. The fact is that Americans want solar energy. Period. However, it’s the problems with the industry—marketing and investing that creates such a rigid market–that has been keeping buyers away. And non-sales are exponential; what I mean here is that you are more likely to buy solar panels if 9 out of 10 houses on your block have them, and much less likely if you are the first one on your block and you’ve never met someone who has them. It’s a funny word when you say it enough… this this this. Anyway . . .
Let’s study Energy Conversion Devices; first, for our clues as to why so many solar companies are failing why don’t we start off with why the company said it failed; “We firmly believe there is a strong and sustainable commercial market for Uni-Solar products,” Julian Hawkins, ECD’s CEO and President, said in a statement, “However, our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring through the bankruptcy process.” And this, in part, is true.
Uni-Solar, as the subsidy was named, became so successful it opened four Michigan plants. Two in Auburn and two in Greenville (that last one is pretty ironic). So why are they now filing for bankruptcy even though the price to produce their panels has actually dropped in price?
The first, and most obvious, reason is the recession that started December 23rd, 2007. Ever since then, foreclosure charts and statistics have been leaning slightly more upward and upward for homes and small businesses. So now, we have to factor in the fact that there is a higher percentage of ALL businesses failing. This, of course, is unfair to solar, since they are under an undue amount of scrutiny from many organizations. The second is that it’s hard to market. Oil and petroleum have had somewhat of an easy ride. Being invested in by what would be billions today, the petroleum industry has several millions in funding and an entire industrial revolution that completely changed what we thought about energy.
However, a silver lining to all this (in case you actually clicked my “this” links instead of just taking my word that they are actual links), is that in the last few months Google has invested over $94,000,000 in the solar industry. According to Energy Conversion Devices, this should fix the problem and make the financial point of “no one ever invests anything” a moot point. According to the Google Treasury and Assistant Treasurer, Axel Martinez, “We believe investing in the renewable energy sector makes business sense and hope clean energy projects continue to attract new sources of capital to help the world move towards a more sustainable energy future.”
The good news is that solar energy will eventually get its investments, prices will continue to drop, and more and more people will be, exponentially, getting solar panels. Eventually, solar panels will be standard in every new home, and not any oil company in the world will have lobbyists who can convince us otherwise.
Written by George W./ Blogger for social-cindy.com
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