"The central planners in Beijing probably never considered persistent cheap and plentiful natural gas supplies, which are really hurting solar sales"
Photovoltaics supply electricity, but while natural gas is used to fire many of the generating plants that produce electricity, oil is a negligible factor and I believe the majority of plants are still coal fired.
The issue in terms of electricty cost in the US isn't the fuel used to turn the generators - it's the ferocious cost of building and operating the plant, and building and maintaining the grid over which power is distributed. It's a classic capital intensive business, where a lot of the costs that determine the price at which you must sell are amortization of the cost to build the production capacity to begin with.
Beijing's central planners suffered the critical blind spot unsurprising in an economy shfiting from "domestic command" to "international market". Lots of Chinese companies saw an opportunity in photovoltaics, jumped in to produce them, and glutted the market. Prices fell to where they are below production costs, even for China. Chine is seeing the boom and bust cycle common to semiconductor electronics. (DRAM, anyone?)
If you are only concerned with a totally planned domestic economy, you know exactly what demand and supply will be, because you stipulate both as part of your planning. In an international market economy, you *don't* know what demand will be, and you make your best guess as to what you must be able to produce. The Chinese are still figuring out forecasting demand that *isn't* government mandated, and many of those solar firms will go belly up or be acquired as competition continues.
Welcome to competition and market based economies, China. It will be a learning experience for you.
That's likely if China can't generate more global demand. In the final analysis, China grabbed a market by the throat, flooded it with cheap panels, then the market went south. The central planners in Beijing probably never considered persistent cheap and plentiful natural gas supplies, which are really hurting solar sales.
China's strategy of investing massively in solar panel production in order to dominate the industry globally doesn't seem so hot now. A recent NY Times article quoted a Chinese bureaucrat with the country's top economic planning agency saying that it would be good for China if two-thirds of its solar panel producers died out and only one third survived.
January 2016 Cartoon Caption ContestBob's punishment for missing his deadline was to be tied to his chair tantalizingly close to a disconnected cable, with one hand superglued to his desk and another to his chin, while the pages from his wall calendar were slowly torn away.122 comments