I've been writing for some time about the chronic overcapacity in global solar manufacturing and the consolidation this is likely to produce. Now here's a sign that at least one company realizes how bad the situation is. GE is apparently delaying the construction of its previously announced Aurora, Colorado, thin-film solar panel factory, and "taking this opportunity to re-look at our solar strategy." I couldn't find a GE press release to back this up, but it's been reported by RECharge and confirmed by Forbes. It's easy to read too much into a single event, but I think this looks significant, particularly in the wake of Monday's Chapter 7 bankruptcy filing by Abound Solar, incidentally another recipient of a sizable federal renewable energy loan guarantee.
If this information is correct, GE is backing away--for at least 18 months--from building a 400 MW thin-film photovoltaic (PV) solar line in Colorado. That suggests that they have concluded that even a brand new facility using the latest technology and large enough to compete on scale with thin-film leader First Solar wouldn't be able to earn an attractive margin in this market. And as a global competitor, GE would presumably regard the new US tariffs on China-based PV manufacturers as insufficient to resolve global PV overcapacity that appears to be stuck at about the same magnitude as demand, despite the continued rapid growth of the latter.
In the last year I've seen numerous articles and blog posts attributing the recent PV price declines to the predicted scale-related effects that have long anchored the industry's central narrative: If we build and deploy enough PV, the cost will fall to the point at which it will be competitive with conventional electricity generation. That may still be true in the long run, but few of these advocates seem to have understood that the industry was getting ahead of its own narrative--that a big slice of the recent price declines was the result of intense competition among producers who over-expanded and whose margins have contracted sharply or turned negative in the process. That's a good reason for GE to hit the pause button and focus on improving its technology in the lab, rather than the fab, while other, less well-capitalized firms struggle to survive long enough to participate in the expected growth surge when solar reaches "grid parity" on a sustainable basis.
PV is an important energy technology with a bright future, but its present doesn't look so great. It's not unusual for manufacturing industries to experience boom-bust cycles, though in my experience those are more common in commodities like chemicals and fuels. However, it is distinctly unusual for governments to contribute so much to the inflation of the boom part of the cycle through a wide array of incentives, loan guarantees and loans to manufacturers and with subsidies--in some cases extravagantly generous ones--to the industry's customers. Such interference may have been necessary to jump-start PV supply and demand, but it will almost certainly make for a harder and messier landing for companies, investors and employees, and in cases like that of Abound Solar for taxpayers.
