By Brian McGraw
Jobs created become jobs destroyed.
Two recent articles highlight the struggle that renewable energy companies run into when taxpayer subsidies are tightened.
The first, a solar panel company in Massachusetts, having received over $50 million in subsidies, is cutting 800 jobs as it struggles to compete with Chinese solar panel production.
Evergreen Solar Inc. will eliminate 800 jobs in Massachusetts and shut its new factory at the former military base in Devens, just two years after it opened the massive facility to great fanfare and with about $58 million in taxpayer subsidies.
The company announced yesterday that it will close the plant by the end of March, calling itself a victim of weak demand and competition from cheaper suppliers in China, where the government provides solar companies with generous subsidies.
Fortunately, in the private sector, taxpayers don’t suffer when their investments don’t come to fruition. China has a distinct advantage in producing solar powers because the cost of labor in China is much lower, and their government has less opposition to producing energy that isn’t cost competitive. The company, a victim of Chinese subsidies, received generous subsidies as well — perhaps not to the extent of Chinese subsidies, but that uncertainty is something that must be taken into account when business decisions are made.
The second story, comes from Georgia, where a cellulosic ethanol plant is closing down after its first batch of production. Range Fuels is said to have received $320 million in federal, state, and private money — the article doesn’t clarify the extent of each source. There also is no information on the amount of cellulosic ethanol produced, though it appears to be more of a test run rather than actual production, so likely a very small amount. Given the federal “mandate” on cellulosic ethanol and continued support for it from the Obama administration, its quite possible that Range Fuels will find private funding to continue future production.