But in order to work, the U.S. will have to provide more subsidies?
Recession Hits America’s Solar Industry
The recession is having a glaring impact on America’s solar power industry.
Demand for solar products has dropped globally, prices have plummeted. Complicating efforts to expand, the industry in the United States faces intense competition from foreign governments making massive investments in what many see as the future of energy.
Facing the difficult economic reality of competing on the world stage, Massachusetts based Evergreen Solar, Inc is turning to China. Lauded as a leader among green energy businesses in the state, the company is taking advantage of the subsidies, cheap labor and production costs offered in Asia. It’s a simple matter of dollars and sense.
“You have low labor costs and low overhead costs in China but, you also get enormous help from the government and so it’s difficult to compete in the United States if you have to contend with higher labor costs and lower government assistance,” said Rick Feldt, the CEO of Evergreen Solar.
The move comes a little more than a year after the opening of the company’s state of the art facility in Devens where hundreds of workers will continue to make some components, while panel assembly will largely shift to China. The state of Massachusetts backed the building of the facility with a $58 million dollar incentive package made up of loans, grants, lease and tax breaks- including roughly 20 million in cash grants.
“That was very helpful but, if I put it in perspective, it’s a 430 million dollar facility- 20 million dollars is about 5 percent,” Feldt explains.
Compared to the incentives other countries offer, Feldt believes the United States is lagging. Case in point- Evergreen Solar’s other facilities overseas have seen much greater government backing.
“We built our joint venture factories in Germany because it’s federal help, not just state help. We got 45% on the first factory- not five- and we got 30% on the next two factories. As we go to China, we’re getting low interest loans on 65% of the factory and equipment. So although the state has been very progressive and helpful, as compared to the types of help you can get by other countries, the U.S. really lags considerably,” Feldt said.