Spain’s Great Photovoltaic Bust – 30,000 Jobs Lost Since 2008

Photo credit: Fernando Tomás de Zaragoza, Spain (Wikipedia)

The German online TAZ here reports on Spain’s solar energy industry debacle in an article with the headline:

    Botched Spanish Solar Roofs

Yet another example of the havoc governments can cause by excessively interfering in the free market (with the best intentions of course).

The boom was great – while it lasted. Solar panels flew onto the roofs of buildings faster than you could make them, and companies couldn’t keep up with the demand.

The very leftist TAZ writes that in 2008, 2600 megawatts of photovoltaic capacity were installed in 9 months alone. Why so much? Because buyers wanted to take advantage of the generous feed-in subsidies paid to solar panel operators, guaranteed for 25 years, before they expired. Unfortunately, quality and reliability took a back seat in the mad rush for gold. Today, everywhere there are signs of shoddy quality and poor function with the installed solar systems.

The boom turns into a fiasco

And now two years later, the warranty period for the installation work has expired and panel owners are no longer under guarantee. TAZ writes:

50,000 installation with a total rated output of 3500 megawatts are now up and running in Spain. 80% of the systems were installed in 2008. There was a gold rush feeling. Everybody wanted to lock into the feed-in tariffs guaranteed for 25 years. In addition to the known brand-names, some used new brands of solar panels – most of them from China – the opportunity was seized in an overheated market. Installation companies bought whatever they could get their hands on.

All the haste was propelled by generous government subsidies, and everybody wanted to get on the gravy train. Now, just 2 years later, many installations are showing up to be defective, shoddy, and running far below the expected efficiency rates. TAZ writes:

The synthetic resin coating in which the cells are embedded is now turning yellow, electrical contacts are oxidizing, various layers are peeling apart and blistering. In addition “hot-spots” are appearing, which in extreme cases leads to a total breakdown of the entire module. Also the overall design of the system is showing to be considerably shoddy.”

30,000 jobs lost in the last 2 years

And because the exorbitant feed-in subsidies were abruptly canceled, many solar installation companies have since gone bust and have disappeared. TAZ writes that industry associations and unions calculate 30,000 jobs in the photovoltaic sector have disappeared since 2008. Meanwhile the Spanish government has turned a blind eye, claiming there are no reliable figures out there to base conclusions on.

30% is expected to be scrapped in the next three years

TAZ writes that solar panel recycling companies are now poised to take on the big business of recycling all the installed scrap. According to some estimates, 30% of the panels are expected to be scrapped in the next three years alone.

Not so, says a state research center, which insists the figure is too high and is closer to “5 to 10%, which is still a figure that is too high”.

35 responses to “Spain’s Great Photovoltaic Bust – 30,000 Jobs Lost Since 2008”

  1. Juraj V.

    *schadenfreude*

    Hope others will learn from this.
    ==============================
    PG: The question is: “Who is to blame for it?” Sarah Palin? Bush! Notice how with the left, everyone else is always to blame, and that they’re always right. It’s a sign of immaturity and incapability to accept responsibility.

  2. DirkH

    Very interesting, thanks Pierre. I usually don’t read the TAZ as they are far left.

    Related:

    Merkel has met with representatives of Eon, RWE, Vattenfall et al; to discuss European energy strategy. European Energy commissioner Oettinger was present. No representatives of wind and solar industries.

    http://www.check24.de/news/strom/energiegipfel-merkel-stromriesen-energiepolitik-33360/

    The idea discussed is to have some sort of unified subsidies across Europe so that, for instance, solar installations will be more profitable where the sun is shining a lot, instead of where the subsidies are highest.

    The meddling continues, the market is political; stay out of it, would be my advice.
    ================================
    PG: Dirk, I don’t know if you detected it, but notice that the real underlying message in the TAZ article is that “wild unbridled capitalism with everyone out to make a quick buck” is at fault here, and not really solar energy itself.

    1. DirkH

      I don’t know. For the TAZ, it’s a pretty factual article and not at all their usual agitprop.

  3. Nonoy Oplas

    Pierre, some of the solar companies are locating in developing countries. I read yesterday that a Japanese-Filipino company is putting up a $150 million solar power company here. They know that there is not much to expect from govt subsidy on solar, so maybe they think that private enterprises here will buy their solar power on their own.

    1. DirkH

      They will use German machinery and cheap native workers to produce solar modules for the market in Germany and Europe. Q-Cells, a German solar cell maker, already has a factory in Malaysia for this purpose.

  4. DJL

    Solar Plant closing in Massachusetts. The State spent 54 Million in subsidies for 350 jobs that only lasted 2 years.

    http://www.boston.com/business/ticker/2011/01/evergreen_solar_30.html

  5. R. de Haan

    Capitalism is not the pundit here.
    On the contrary.
    This debacle is caused by Green Socialist policies to control a sector that should be private.

    Without the mind boggling tax payer funded grants this entire industry would not have existed.

    This is one of the great examples of the Green Nanny State in action and the best example why we don’t need it.

  6. Marcus Kesseler

    Hi,

    unfortunately I don’t have a source, but I’ve read somewhere that quite a few disenchanted and desperate Spanish solar energy investors resorted to simply feeding the mains electricity into their solar feed-in network.

    I find this energy/financial first order perpetuum mobile mind-boggingly clever, since everybody involved profits and nobody really is harmed in any way (at least nobody worth speaking of):

    1. The owner of the small plant buys a KWh at 8 cents and instantaneously resells it at 40 cents (my numbers). And this works very reliably, even if you’ve grown your own silicon panels from beach sand or they are under a 2 inches thick coat of bird shit!

    2. The goverment statistics look great, since the amount of green energy fed in is much higher than even in the most optimistic projections. Best of all, and this really is nothing short of a miracle of green energy technology, these solar panels produce copius amounts of electricity EVEN AT NIGHT!!! Ha, take that you conservative “Green-energy-is-unreliable” fearmongers.

    3. The utility profits from greater sales for both: conventional and green electricity. For conventional sources this improves economies of scale. The added costs for the solar feed-in are not an issue, since they are allowed to pass the full subsidy costs to the consumer anyway. Even better, there is a substantial market for green consumers willing to pay a premium for power that is “guaranteed” to come from clean sources, so the profit margins are significantly higher. So, even though utilities are buying back their own power at a 300% higher price, this is actually improving their profitability!

    Are green energy market distortions cool, or what?

    Regards,

    Marcus

  7. Rob Honeycutt

    You guys must totally love that China is putting more money into wind and solar than anyone these days! Right?

    They are zooming past all of us for installed wind and solar. The Chinese government is committed to adding 500 GW of renewables by 2020.

    1. Ike

      and additional to that, China is also planning or already building:

      24 new atomic reactors with 25.400 MW
      Planned are 40.000 MW in 2020.
      In total China plans to reach 60.000 MW with atomic reactors after 2020.

      1. Rob Honeycutt

        But they are expanding renewables faster, and they are cutting back on coal, even though they have ample resources of domestic coal.

        1. Huw

          China is actually short of coal and imports more and more of it. China is buying mineral rescources, including coal reserves, in other countries. Even so, it is set to build a huge coal fired generating capacity over the next decade as well as nuclear and renewables.

    2. Pointman

      I notice you use the future tense Rob. China are quite happy to manufacture and sell the West crap solar panels at a very healthy markup. They reality is, they torpedoed Copenhagen and made Cancun such a bleak prospect that every major politician (including the Goracle) didn’t even bother attending.

      http://thepointman.wordpress.com/2010/12/03/cancun-and-the-chinese-perspective-on-it/

      Pointman

    3. Ed Caryl

      Rob, didn’t you notice in the above that the crap solar cells came from China?

    4. RichardP

      Rob,

      The only reason China is “building” that “Green” capacity is because of Carbon Indulgences. And even then they are complaining of the lack of funds to continue them. Also, many of the projects they are “building” are not real. They double and triple count sites for the same credit. I would not use China as an example.

  8. Marcus Kesseler

    Hi Rob,

    probably you know that China is also – by far – the biggest investor in coal power generation. Afaik, they are currently – on average – completing one large coal power plant PER WEEK!

    I think China’s energy policy is actually quite simple: They are investing into ANYTHING that will produce electricity. And due to the sheer scale of the Chinese economy (and it’s unbelievable sustained growth rate), they end up being the biggest investor into any form of energy generation.

    Also, note that the intermittency/variability of solar or wind, which is a big deal for developed economies used to 99.999% power availability (the famous “five nines”), is not such an issue in a developing country, since everbody is used to almost daily blackouts anyway (I know, because I grew up in Sao Paulo and – this was back in the 70es – 1 or 2 blackouts per week were just a fact of life). Hence, even if wind or solar energy is variable, I still have MORE energy when the wind is blowing, so let’s do it! It really IS simpler for China to handle the variability. For us westeners a variable power source which, in some circumstances, would lead to blackouts, is a huge step back from what we have now. For China, even if variable, it just means shorter or less blackouts!

    Regards,

    Marcus

    1. Jerry from Boston

      Marcus,

      That is a very interesting perspective re: how renewables could reduce the aggravating occurrences of blackouts in the developing world. Thanks.

  9. Paddy

    If 30,000 new green jobs have been lost, should not the 2.2 jobs/ green job killed also be tallied? 30,000 + (2.2 * 30,000) = 96,600 total jobs lost and/or killed.

    1. Rob Honeycutt

      You realize that those oft quoted figures for green energy job losses come from a single publication from a right wing oil funded think tank. Right? The data in that report has been debunked over and over. They conflate overall job losses due to global economic slow down with green energy job losses.

      1. DirkH

        Rob, the money paid for workers in a nonproductive sector must come from the workers in the productive sector. This reduces their wealth, the money that they can spend and thus destroys jobs in the private sector. It actually *produces* an economic slowdown; something that Keynesians like you fail to understand.

        BTW, in every green project the new job opportunities are announced as if these were all new jobs creating all new tax revenue (through income tax etc) and it is never mentioned that the people who will occupy these jobs will largely leave an old job in which they also earned money and paid taxes.

        Did i mention the damage to the economy caused by delegating engineers, managers and workers to an unproductive sector who would have contributed to more productive enterprises had one not decided to squander their talent…

        1. Rob Honeycutt

          “a nonproductive sector?” Where does that come from?

          1. Nonoy Oplas

            Nonproductive sector — to me, are those from the various government regulatory bureaucracies, the UN, supposedly independent NGOs but get huge funding from govts and the UN.

          2. Rob Honeycutt

            Nonay… The longer form of my question is: Since when is the energy sector a nonproductive sector.

          3. Ed Caryl

            When it doesn’t produce as much energy as it consumes.

          4. Nonoy Oplas

            Then I go along with Ed Caryl’s definition above. If a power plant produces X $ of power but requires 2x or 3x $ of subsidy to keep it going, then it is a nonproductive power plant.

        2. Rob Honeycutt

          BTW, glad you identified me as a Keynesian. Spot on. 😉

  10. R. de Haan

    Now we see our politicians publicly promoting electric cars.
    Politicians should stay out of the public sector and let free markets decide what technology wins. No interference.

    Electric cars at best will fill a niche market but at this moment in time, even with gigantic subsidies the cars are to expensive for the service area they cover. The much praised reduction in exhaust and fine dust emissions is a myth.
    Much of the fine dust is produced by tire wear and braking.
    Electric cars will be just as “dirty” as any other car.
    In regard to exhaust emissions they will be much dirtier.

    The big and still unsolved problem lies with the battery and the charging losses.

    If we would switch our car park to electric we would need 4 times the current power generation.

    In most countries 50% of energy consumption goes into power generation.
    4 times the required power generation to service car battery charging will result in a doubling of the total energy consumption.

    Result: we will accelerate the use of fossil fuels and accelerate the amount of emissions.

    Besides that we will be digging holes all over the planet to extract the rare earth materials necessary to produce the magnets, the electronic components and the batteries.

    And somewhere along the line these rare materials will be more expensive than fossil fuels and the entire market will collapse.

    How long are we going to accept that our societies are run by trolls an idiots who tell us what lamp we will use and what car we will drive?

    Here is a sane view on the subject by Burt Rutan
    http://rps3.com/Files/Ochkosh_2010_talks/Electric%20flight%20keynote.pdf

    And here is a sane article on the subject of car batteries:
    http://www.nytimes.com/roomfordebate/2010/10/07/will-electric-cars-finally-succeed/electric-cars-are-not-the-answer-to-our-problems

  11. Mindert Eiting

    A bit off topic but if you want to read a brilliant blog: http://motls.blogspot.com/2011/01/kevin-trenberths-weird-opinions-about.html#more

  12. Edward.

    Solar panels,

    Prime idiocy from politicians trying to solve a non existent problem (AGW) with (more than) useless palliatives…… how stupid can you get?

    We await in Britain with salivating anticipatory glee (probably not if you pay taxes), for the impending disaster of the British experiment in gross waste and mismnagement of valuble resources Aka ‘feed in tariffs’.

    Ropeycnut,

    China is an old master at playing both ends against the middle, it needs massive growth (GDP) to remain ‘treading water’, it encourages wind turbines and solar panel installation and builds more coal powered stations monthly + nuclear etc. The environment is a small concern, if you believe the Peoples Republic of China’s ‘green rhetoric’ – god help you – but then you do not surprise me, socialists of every shade of red are all too easily persuaded by BS cant, politics and ideological cul-de-sacs/genocidal lunacy.

  13. R. de Haan

    Rob Honeycutt
    13. Januar 2011 at 19:37 | Permalink | Reply
    You realize that those oft quoted figures for green energy job losses come from a single publication from a right wing oil funded think tank. Right? The data in that report has been debunked over and over. They conflate overall job losses due to global economic slow down with green energy job losses.

    That’s not true.

    I have at least 15 reports that totally destroy wind and solar power.
    None of them have been financed with oil money.

    What we do have are solar factories and wind mill factories financed with oil money and solar and wind farms exploited by oil companies.
    Think Shell Solar for example.
    We have more oil companies riding the AGW gravy train and practically none supporting the skeptic views.

    Oil companies financing studies and reports against the green sustainable wonder world is a warmist fallacy, just like the enormous scientific consensus in support of AGW.

  14. Paddy

    Rob Honeycutt, you stated: “You realize that those oft quoted figures for green energy job losses come from a single publication from a right wing oil funded think tank. Right? The data in that report has been debunked over and over. They conflate overall job losses due to global economic slow down with green energy job losses.”

    Prove it. The study was done based upon empirical data by an Spanish academic.
    A Google search of Dr Calzada Alvarez reveals the his study was refuted by such reliable sources as Daily Kos and Media Matters. I submit that Chris Horner deals with the study’s legitimacy in a more rational manner:

    http://spectator.org/blog/2009/04/15/spokesmanship-is-bliss

    1. DirkH

      Also, if Dr. Calzada were wrong, Spain would have jobs today, wouldn’t it? 😉

  15. R. de Haan
  16. R. de Haan

    “The boom turns into a fiasco

    And now two years later, the warranty period for the installation work has expired and panel owners are no longer under guarantee. TAZ writes:

    50,000 installation with a total rated output of 3500 megawatts are now up and running in Spain.”

    It has been a fiasco from the beginning.
    The 3500 megawatts output is NO BASE LOAD OUTPUT.

    It is the maximum rated output when the sun shines.

    The moment a cloud blocks the sun or at night, the output is reduced or ZERO.

    Wind and Solar don’t provide a base load power solution.
    They just represent a big mistake because you need back up power 100% of the time.

  17. DirkH

    Ecos (sierra Club) fight ecos (Solar energy types).
    Sierra Club sues against solar project in Californian desert.
    http://www.reuters.com/article/idUSTRE70432N20110105