How Job Loss Could Help the Solar Industry Flourish

Posted on Apr 9, 2013 in Green Jobs by Chris Keenan 0 Comments

Green jobs are in jeopardy, as many solar manufacturers are finding it difficult to be profitable. However, that may actually be a good thing, as experts feel that a large number of solar companies have to close in order to stop the rapid drop in solar panel prices and help supply and demand begin to match back up again. When that happens, the companies that are still in business could move forward, purchase new equipment and start to figure out how to make solar power more desirable than fossil fuels. All of that, of course, will eventually lead to job growth.

Anticipated Bailouts

Even though some failure in the solar industry could be a good thing, local governments across the world are poised to bail out companies like Suntech. If that happens, solar panels will continue to be produced at a high rate, far surpassing demand. While consumers are benefiting from this situation because solar panel prices are currently very low, solar manufacturers certainly cannot say the same thing. When prices drop, so does a company’s profit. In the case of the solar industry, most manufacturers are not making enough off their panels to put money back into new equipment, and they are certainly not making enough to add new jobs.

Chinese Opinion

In the beginning, the Chinese government was pleased with the rising supply of solar panels. However, they now believe that things have gotten out of control and are taking the position that some companies should be allowed to go under. While this will mean job loss, they are looking at the big picture and what will benefit the industry most in the future. However, local governments don’t necessarily agree, as they are worried about the thousands of jobs that will be cut as the result of the closings.

The Problem With Cheap Panels

Because there are so many solar panels available, and because they are commanding very low prices, companies with innovative ideas are finding it hard to break into the market. For example, GE has a new solar product they would like to unveil, but they have not been able to invest in a factory yet because of the dismal market outlook. New companies that were formed to help make panels at a lower price aren’t doing well either, because manufacturers just don’t have the money to purchase new equipment, even if it will help them reduce their bottom line. Because of this, many jobs have already been lost because these companies are going out of business too.

Some green jobs are exploding. For example, there is growth in the manufacturing and construction fields, as well as in the integrated pest management field, with Midland pest control companies expanding at a nice rate. We may see improvements in the solar market as well, but that will be dependent on how local governments react to the current situation. If companies fold, there will be job loss, which is terrible in the short term. However, any company that is still in business should begin using new technology and building the market back up.