The new sun kings: How China came to dominate solar powerRussell Abney raised two children on solar power. The 49-year-old Georgia Tech graduate worked for the last decade in Perrysburg, Ohio, a suburb of Toledo, pulling a good salary as an equipment engineer for the largest American solar-panel maker.
Russell Abney raised two children on solar power. The 49-year-old Georgia Tech graduate worked for the last decade in Perrysburg, Ohio, a suburb of Toledo, pulling a good salary as an equipment engineer for the largest American solar-panel maker.
On the other side of the world, Gao Song boasted his own solar success story. A former organic fruit retailer who lives in the dusty Chinese city of Wuhan, he installed solar panels on his roof four years ago and found it so lucrative that he went into business installing them for others. By last summer, he and a team of 50 employees were installing solar-panel systems on nearly 100 roofs a month.
Then China shook the global solar business—and transformed both their lives.
“A small vibration back in China,” said Frank Haugwitz, a longtime solar industry consultant in Beijing, “can cause an avalanche in prices around the world.”
Late last summer, Chinese officials began publicly toying with slashing the subsidies they offer domestic solar-panel buyers. Mr. Gao’s business dried up, and he laid off half his workers. “I have been working hard and was just off to a good start,” he said. “Now I have to start over.”
China’s solar-panel makers cut their prices by more than a quarter to compensate, sending global prices plummeting. Western companies found themselves unable to compete, and cut jobs from Germany to Michigan to Texas and points beyond.
Those points included Perrysburg—where Mr. Abney and about 450 other employees suddenly found themselves out of work. “Within just a few months, it all came crashing down,” Mr. Abney said. “It’s like a death in the family. People feel awkward talking about it.”
President Trump, who pressed President Xi Jinping of China on trade and other issues this week when they met at Mar-a-Lago in Palm Beach, Fla., has vowed to end what he calls China’s unfair business practices. Much of his oratory has involved old-fashioned smokestack industries like steel—industries in which the jobs were already disappearing even before the rise of China.
But economists and business groups warn that China’s industrial ambitions have entered a new, far-reaching phase. With its deep government pockets, growing technical sophistication and a comprehensive plan to free itself from dependence on foreign companies, China aims to become dominant in industries of the future like renewable energy, big data and self-driving cars.
With solar, it has already happened. China is now home to two-thirds of the world’s solar-production capacity. The efficiency with which its products convert sunlight into electricity is increasingly close to that of panels made by American, German and South Korean companies. Because China also buys half of the world’s new solar panels, it now effectively controls the market.
For much of the past century, the ups and downs of the American economy could spell the difference between employment or poverty for people like Chilean copper miners and Malaysian rubber farmers. Now China’s policy shifts and business decisions can have the same kind of global impact once wielded by power brokers in Washington, New York and Detroit.
The story of China’s rise in solar panels illustrates the profound difficulties the country presents to Mr. Trump, or to any American president. Its size and fast-moving economy give it the ability to redefine industries almost on a dime. Its government-led pursuit of dominance in crucial industries presents a direct challenge to countries where leaders generally leave business decisions to the businesses themselves.
Already, China is the world’s largest maker and buyer of steel, cars and smartphones. While it does not necessarily dominate those industries, its government ministries are moving to replicate that success with robots, chips and software—just as in solar.
—©2017 NEW YORK TIMES