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Is China Taking Over The Solar Market?

The news emerged this week that solar panel manufacturer Abound Solar is about to file for bankruptcy, despite receiving a $400 million loan guarantee from the government.

Just $68 million of this loan has been used and some of this is expected to be recovered. The company has cited huge competition from Chinese solar panel suppliers which is leading to plummeting prices.

Abound is not the only solar panel company to have hit major problems. Solyndra collapsed last year and had also received federal funding. This time to the tune of $535 million. Obviously these failures are being seen as evidence by the Republicans that the support of cleaner energy is a waste of taxpayers money. Do they have a point?

So how is it that a country which has only just started to recognize the need to clean up their environment, can produce green products cheaper and more efficiently than an American company who has had government backing to such a degree?

What on earth are the Chinese doing better? It all comes down to cheap manufacturing and huge capacity. In fact there has been such an oversupply of solar panels to the market that there is a glut. The fact is that we all know that China can produce certain electronics more cheaply than the US could ever hope to. That is why Apple choose to manufacture their products in the far East.

But what happened to supporting American industry and applying the principles of buying local to the green market as well and well as the farmers market? The government has gotten behind the idea and is putting their money where their mouth is. But the US public just don't want to pay more for a product they can get cheaper from a Chinese manufacturer.

The Obama administration truly believes that the green sector could be what the American economy is looking for. It provides jobs, increases trade and improves the environment all at the same time. But this is simply not possible if we cannot compete. Right now, no amount of government subsidy, cheap loans or government marketing is going to make the US average consumer pay more for a green product.

It seems that the government would be better placed to stop alienating the US taxpayer by supporting companies which cannot compete and use that money to encourage the purchase of these cheap solar panels from China. The result could be a net decrease in the amount of energy used and a fairer distribution of tax dollars.

Politically it might just be what the current government is looking for. Lower energy bills for the average consumer, an improving environment for the green supporters and more money available for more worthwhile projects for the taxpayer. It sounds like a win win – except for the business owners and their employees, of course.

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