Another day, another story about a solar company moving part of its operation to China. This time it’s Advanced Energy in Fort Collins, which will lay off 5 percent of its labor force and move “more of its manufacturing to China as it works to increase profitability,” according to the Coloradoan.
Advanced Energy was one of several companies in Northern Colorado that received tax credits to create “green jobs.” The Northern Colorado Business Journal reported in January 2010:
Firms in Northern Colorado nabbed a lion’s share of the renewable energy manufacturing tax credits doled out in the state, but whether the incentives will have a direct, near-term impact on employment remains to be seen.
In early January the Departments of Treasury and Energy awarded $2.3 billion in tax credits for expansion or creation of manufacturing facilities in the advanced energy sector. The credits can be taken on tax liability for up to 30 percent of the total value of the project. In Colorado, companies netted $75.2 million in credits. Of that total, $52.1 million were awarded for projects in Northern Colorado.
The credits were lauded as a job-creating incentive at the federal and state level. However, the projects in Northern Colorado were already planned, under way or in some cases complete when the credits were awarded.
Fort Collins-based Advanced Energy Industries Inc. received a tax credit worth $1.2 million for a new manufacturing line for the company’s Solaron solar inverters.
Attorney Rex O’Neal, “co-chair of Faegre & Benson’s emerging companies practice and new energy, clean technology and climate initiative” explained who really benefits from these tax credits:
O’Neal points out that, in the short-run, the true beneficiaries of the tax credits are the company owners. In that case, the credit is an incentive for investors in these companies who might bring more capital to the table.
Neal also called the tax credits “an ‘if we build it, they will come’ mentality.'” Reducing the cost of productivity would make these solar panel manufacturers competitive. Green energy advocates will scream the Chinese are to blame because they are making solar panels way too cheap, thus undermining competition. Far left Think Progress recently wrote:
With Chinese producers in a far more dominant position than in 2009 and a slew of solar manufacturing facility closures announced in the U.S. in recent months, concerns about dumping have resurfaced. Just yesterday, Oregon Senator Ron Wyden sent a letter to President Obama asking him to investigate whether or not Chinese companies are selling product below cost in order to push American producers out of the market. He also called on the administration to implement a trade tariff on Chinese modules:
‘Letting that happen is unacceptable. Please know that if your administration is unwilling to take the appropriate steps, with haste, I will advance a legislative effort, as provided by the U.S. trade remedy laws, to ensure that the American solar industry is not harmed by unfair trade.’
Current U.S. energy policy created the problem because it put the cart before the horse with mandated renewable energy standards and taxpayer subsidies for expensive, unreliable energy sources. We subsidized supply, mandated demand, and still can’t be competitive.
There is another problem that advocates of green energy don’t want to discuss because the solution means more mining in the U.S. Right now, China controls 95 percent of the world’s available supply of rare earth minerals, which are necessary for production of solar panels, wind turbines, batteries for hybrids, and more. The Chinese are willing to mine them. The U.S. is not. Furthermore, Chinese processing of rare earth minerals has turned parts of that country into toxic waste dumps where the water is not suitable for human or animal consumption. It has become the dirty secret of clean energy.
While U.S. solar companies continue to relocate to China, it isn’t just because of cheap labor and capital from the Chinese government, but also, the availability of rare earth metals. This was part of the Chinese strategy as well. Until we are willing to mine rare earth minerals that we have and are necessary for production, we will continue to see companies leave. If green technology is the future then we have to produce the raw materials to control our destiny.
Throwing taxpayer subsidies, which only benefit owners and private investors, at companies doesn’t guarantee green jobs or clean energy. Renewable advocates need to embrace mining as the green job of the future.
