The federal government gave the solar power industry support because the sector promised to provide three things to the United States. These are jobs which the country needed immediately, development of an American solar industry that can compete on the global market in the near future, and reducing pollution in the atmosphere for the long run.
Obama administration gave out subsidies and loan grants to solar companies. One of the beneficiaries was Solyndra, which was given $528 million in government loans before it declared its bankruptcy. It had a unique design that utilizes cylinders instead of panels. It promised to generate at least 1,000 new jobs in a factory.
But people are wondering why the administration banked on the solar industry to make new jobs. It uses robots in manufacturing the solar cells and it has no moving parts to service once it is installed on rooftops. Economists say that it is not as labor intensive as other sectors.
Analysts say that energy industries are eating up each other. When enough solar plants are built, it would replace the coal plants in the area. That would mean that workers from the coal plants would be displaced while solar plants hire new workers.
Another case against the solar industry is the flooding of solar panels from China. SolarWorld, which is the largest producer of solar cells in the United States, has filed a dumping case against China last October 19.
Installation of solar panels is the number one contributor of jobs in the solar industry and could not be outsourced to others. But the manufacturing part of the solar panels is another story. Environment America, an advocacy group, stated in a recent report they released that only 24,000 people work in solar manufacturing in the United States, as compared to the 52,500 in installation.
Analysts say that coal jobs remain because coal is exported. Nuclear industry employs thousands of workers to make components for reactors abroad. As for solar panel manufacturing, it was first intended to be an export industry but its future as an exporter is still uncertain.
Electricity from solar power is more expensive than electricity from conventional energy sources. Consumers would pay more for the electricity they use and taxpayers would contribute to the government subsidies for solar industry.
The good news is that solar power costs have been dropping in recent months. Suppliers wanted to have a spot in the market. This led to more price drops. A recent report showed that solar power has the best return on investment among renewable energy choices.