China’s Renewable Energy Industry Has the Capitol Complainers Out in Force

China’s Renewable Energy Industry Has the Capitol Complainers Out in Force
by Tony D’Altorio, Investment U Research
Monday, November 15, 2010
My colleague, David Fessler, referenced a recent report from Ernst & Young. In it, it showed America losing its top spot on the renewable energy ladder to China.
Apparently, the Obama Administration doesn’t like that news. In its latest cold war with China over currencies and trade, the U.S. is accusing the other country of unfairly subsidizing its renewable energy industry.
In other words, Washington is accusing Beijing of helping itself out a bit too much. And if it can prove that, it plans on taking it all the way to the World Trade Organization.
On the surface, the dispute is over the Chinese government’s support for green industries. But really, the U.S. is just mad it lost its title…
China Expands Its Renewable Energy Industries
Basically, the American government wants to punish China for its renewable energy industry.
But it might want to focus on its own failures before faulting others’ successes. Because while Washington has talked a lot on the subject, Beijing has walked the walk.
Chinese officials may even make more investments on better grid infrastructure and clean-tech industries. And they’re bandying figures around $600 billion.
You see, they take green technology seriously. To them, renewable energy is a huge step towards their economic restructuring agenda.
China has pushed hard to close older industrial facilities and build more efficient ones. It plans those efforts – and the larger green industry – to provide new economic growth.
In fact, of the nine key emerging industries ordained by Chinese policymakers, six are green technology-related. And it’s wind power equipment effort is already experiencing success.
The country’s demand in that area has more than doubled in each of the past four years. It’s on course to beat its official 30 gigawatts of installed wind power target by 2020.
At that rate, it will easily surpass the U.S.’s capacity.
The same goes for the solar power industry, where the Chinese have proved adept at mastering new techniques and producing them on a large scale. That has resulted in prices dropping quickly, allowing them to grab a large share of the market away from the U.S.
The U.S. Slips to Second
The United States hasn’t helped itself either in how it develops new energy technologies.
For example:

• Silicon Valley promised to create a new, world-beating solar energy industry.
• Venture capitalists loved the sound of that, throwing money willy-nilly at new solar start-ups.
• Most of those newbies were trying out a new technology based on printing thin layers of exotic new materials onto cheap substrates.
• The resulting panels didn’t convert sunlight to power as efficiently as silicon, but they were supposedly cheaper to make and install.

In the end though, many of them just turned out to be expensive and time-consuming science projects. So now, many thin-film solar companies can’t reach the mass production levels they need to properly compete.
Of course, it didn’t help that Silicon Valley vastly underestimated China either.
At the time, China was using older technology based on silicon cells. And Silicon Valley confidently thought its own methods far superior.
Yet today, even First Solar (Nasdaq: FSLR), the leader in thin-film solar technology, is feeling the competition, judging from its recent sharp fall in gross profit margin.
The U.S. Government Blows Hot Air
Lack of government action has caused the U.S. to lag in renewable energy.
In fact, many in the American industry are actually angry at Washington. They don’t like the administration’s overdue recognition that their competitive edge has eroded after years of neglect.
Mike Eckhart, president of the American Council on Renewable Energy, spoke about the Obama Administration’s investigation, saying: “The Chinese did what they said they were going to do, and the U.S. didn’t. The fact that the U.S. didn’t support its renewable energy industry in the same way that other countries did is no grounds for complaining now.”
And while the U.S. points to “unfair” Chinese policies, Chinese companies can’t seem to make much headway here. Just three of their wind turbines in total have sold in the U.S.
And the towers and blades for those were U.S.-made anyway… So I guess it all depends on what your perspective is to determine the definition of “unfair.”
Good investing,
Tony D’Altorio

from - http://www.investmentu.com/2010/November/chinas-renewable-energy-industry-beats-out-united-states.html