India to impose Anti-dumping duties soon The Chinese and other Asian players like Malaysia and Taiwan have continued to supply their solar cells and modules all over the globe at really cheap rates. In fact the top cheap solar panels supplied globally are almost all Chinese. This has resulted in the local industry dampening in […]
Malaysia is one of the biggest hubs of solar manufacturing in the world through aggressive government support programs and tax holidays.It is home to the biggest manufacturing site for the world’s most valued solar company First Solar and has been the preferred choice for solar investment from leading global solar companies .The Reasons behind Malaysia’s Success is government support in the forms of tax breaks,loans,simple regulation and low labor costs.While many of these subsidies have been given by other countries like Singapore,Malaysia has done it with a finesse and dedication that has made it a winner.Many world class companies have started solar manufacturing operations in Malaysia like Flextronics,Q-Cells,Sunpower and First Solar.The country has been planning to implement an ambitious Feed in Tariff program to subsidize Renewable Energy generation.The country has been inspired by Germany whose FIT policy has led it to become the largest solar generating country in the world despite its low solar radiation.
About 800 jobs in the Solar Industry will be lost directly to China as the USA administration has failed to support its established solar companies.Massachusetts had supported Evergreen with $58 million in subsidies but it was not enough for Evergreen to compete against the ongoing subsidies received by the strong Chinese players who have captured almost 70% of the global market in a few short years.The other US solar companies like Sunpower and First Solar are surviving by manufacturing most of their solar panels in Malaysia and other places.The recent “Buy American” Pentagon Law may not help all that much as module making is a low value add activity already being done by European and Chinese players in the USA.In the complicated supply chain of global manufacturing its difficult to understand who ultimately benefits and loses from such provisions.Note most of the polysilicon going inside the wafers and cells made in Asia are imported from USA and Europe.
Deflating Developed Countries are fueling Inflation in Developing Ones with ultra low interest rates.QE2 has been heavily criticized around the world due to the dangers of it creating asset bubbles in emerging markets as yield hungry investors look for growth at any price.With hundred of billions flooding emerging debt and equity markets,the situation has become volatile for a lot of countries.Brazil has already seen its currency skyrocket in the last 2-3 years due to the huge spread between its bond yields and the US interest rates.With carry investors able to make around 10%,Brazil remains a favorite market for the inflow of dollars.Other countries like Thailand,Malaysia,Indonesia have seen their stock markets rallying to all time highs as well.Many of these countries have already imposed capital controls earlier.Now they are increasing further,as monetary authorities rush to close the gates.
Malaysia is set to become one of the largest solar panel producing nations overtaking much larger rivals USA and Japan as world class companies start/expand capacities in Malaysia.Every country is trying to promoter Green Industry in the fight for leadership of this new age industry and to create high paying green jobs.Billions of Dollars in Green Stimulus has been doled out by governments but with varying degrees of success.USA has managed to squander most of its Green Subsidies despite possessing a very strong technological base as US Companies shutter US factories to outsource production to Asia and Mexico.European Countries have seen a similar phenomenon as their high costs force domestic companies to shift to Asia for their survival.China and Taiwan are the largest solar cell producers in Asia due to their low costs,good infrastructure and massive government support.Taiwan has also been able to leverage its semiconductor strengths with companies like TSMC and AUO expanding into solar energy.However Malaysia has been a surprise winner as well.It is important to understand the reasons behind Malaysia’s success as it has beat countries with much larger solar energy markets like USA and Japan.It also has no massive semiconductor industry like Taiwan which can redeploy its skills.It has only recently introduced a Feed in Tariff Policy to promote Renewable Energy
Not only Europe,even US is rapidly losing Green Jobs to Asia.Earlier Evergreen Solar had decided to shut down its US plant to set up a factory in China and Energy Conversion Devices is laying off workers to hire more in Mexico.The high costs of labor and capital have made it unfeasible for Western companies to manufacture in the Developed Nations.High Subsidies in the form of Low Interest Long Term Loans,Tax Holidays,Free Land have made the Asian countries irresistible to US companies.First Solar which is the largest manufacturer of panels in the world has most of its production in Malaysia where it enjoys a 15 year tax holiday.Chinese Company’s get massive subsidies from the government.This combined with extremely low worker and managerial salaries make western factories totally uncompetitive in a globalized world.REC which is one of the world’s biggest solar polysilicon and wafer producers has decided to shut down its module plant in Sweden.While the reason given is isolation from other factories,I suspect the costs are too high in expensive Sweden.Another European Solar Factory closes as Green Industry moves to Low Cost,Subsidy Rich Asia