Krugman: Solyndra a victim of technological success

Earth to Krugman: solar prices aren’t dropping because of Earth-shattering technological breakthroughs.

Paul Krugman writes in the New York Times today that:

But Solyndra’s failure was actually caused by technological success: the price of solar panels is dropping fast, and Solyndra couldn’t keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.

However, the real reason that Solyndra failed and the real reason that solar prices are plummeting is spelled C-H-I-N-A.

As reported by Reuters,

When the company announced the long-term contracts in 2008, solar panel prices were higher and developers of solar projects were scrambling for supply. As a result, three companies committed to three-year or five-year contracts that were touted in the 2008 press release, according to Ben Bierman, the company’s vice president of operations.

However, the solar panel market soon changed. China began pouring billions of dollars of subsidies into panel manufacturing, driving prices much lower. A dearth of supply soon became a global glut.

here is reality expressed mathematically:

Massive subsidies + slave labor + no environmental standards ≠ Technological success

Read Krugman’s column.

6 thoughts on “Krugman: Solyndra a victim of technological success”

  1. Solyndra was killed by American Labor Unions, American Environmentalists, American Lawyers , American Politicians, American Bureaucrats and Solyndras American Executives….”CHINA” is a red-herring for simpletons…

  2. The dramatic price drop in the price of refined silicon over the past several years had a bit to do with it too.

  3. Solar advocates like to point to the cost of cells as their metric in claiming that solar will one day be economic. The problem is that even if the cells were free, solar would be incredibly expensive.

    First, the sun does not shine 4380 hours per year, because of that nasty problem, no doubt caused by global warming, called night. That does not include twilight, clouds, and dirt. Therefor, every watt of solar must be supplemented by an equal or greater amount of generating capacity or of storage. So you have to pay for two systems instead of one.

    Second, solar requires land. Let’s be real optimistic and assume that you can get 1 Watt per square meter of installation (this would only be possible in the deserts of the Southwest). A gigawatt (one billion watts), the size of a big modern coal or nuclear plant, would need 1 billion square meters = one thousand square kilometers = 386 sq. mi. = 247,000 acres. Maybe you can get your cronies in the Obama Administration to give it to you, but other wise it will cost millions of dollars, and millions more to grade and instal roads and drainage. And that is expensive, even if the flipping cells are free!

  4. Not completely. China has used high subsidies and low standards before to corner markets. They have a near-monopoly on rare-earth elements despite America having huge deposits because no one can mine them at China’s prices without huge losses or sacrificing all HSE control.

  5. Yes, but Walter think of all the squeegemen we could employ in the desert southwest to keep the arrays clean and in tip-top shape.

  6. Technology companies in the manufacturing business need to be able to not only adjust to lower prices, they need to help create lower prices as demand and volume increase. The computer industry didn’t complain about lower prices from China, they took advantage of it.

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