Handing China the Renewable Future
NEW YORK (TheStreet) -- Renewable energy is like any technology. It starts out expensive and grows cheaper over time. Money is its primary fuel -- money for research, money for start-ups, and money to get early versions into the market.
To fuel the new market, Western countries have created various forms of subsidy, such as "feed-in" tariffs and loan guarantees on risky breakthroughs. It's just what we did with computing, transistors and the Internet, creating market conditions before a market exists, setting the stage for a boom.
So now that the boom is on the horizon, politicians are doing all they can to hand the fruit of this labor to China.
The biggest turnaround likely is in Australia, where a coming conservative government is expected to scrap programs that have the country on track to get more than 22% of its energy from wind, waves and the sun by 2020, writes The Guardian. The local Limbaugh, named Alan Jones, even led a rally claiming wind energy "terrorizes" small towns, reported the Daily Telegraph.
Germany is also going to cut its subsidies in half after the next election, according to CleanTechnica, and the U.S. House plans to cut our subsidies in half as part of its next budget, according to The Hill.
Thankfully, a move by states to protect local markets from out-of-state renewable competition was recently killed by the U.S. Circuit Court. The decision was posted to EENews.Net.
The question becomes, whom does this benefit? While advocates of coal may think it benefits them, and advocates of nuclear may feel the new trend benefits them, the big winners in all this are more likely to be the Chinese solar companies, such as Yingli Green Energy
These are the companies that survived the brutal market shakeout of the last few years and, in the process, brought the costs of solar cells using polysilicon down to less than 50 cents/watt, the point at which an efficient channel can create cost parity with other forms of grid energy.
At these prices, all sorts of new buyers are appearing. Latin America and Africa are now emerging as major markets for renewable energy projects, writes SustainableBusiness.com.
The business isn't going to go away. The question is who will get the business. In the present environment, it's unlikely to be companies such as Sunpower