SHANGHAI â€” The recent high-profile implosion of Fremont, Calif.-based solar manufacturer Solyndra can be traced to sprawling cities in China, where low-cost manufacturers have come to dominate the global industry by pushing down the price of solar panels to a point where most U.S. companies canâ€™t compete.
China now claims three-fifths of the worldâ€™s solar panel production capacity. Chinese solar panel manufacturers such as JA Solar, now the worldâ€™s largest, say companies from Silicon Valley and elsewhere blundered by betting on new technologies instead of focusing on making panels cheaper to produce.
â€œItâ€™s not a pure technology business,â€ said JA Solar CEO Peng Fang, whose workforce grew from 4,000 to 12,000 last year. â€œIf you invest in it as technology first and (cost reduction) second, you miss it. You need to reverse that.â€
But some industry experts disagree. They say the failure of some U.S. solar panel manufacturers â€” with more collapses likely to follow as panel prices continue to fall â€” does not mean the sun has set on Silicon Valleyâ€™s solar ambitions. Ultimately, they say, breakthrough technology from Silicon Valley and elsewhere will be needed to drive the solar industry forward.
While â€œyou canâ€™t beat the Chinese at their own game (of low-cost manufacturing), it is possible to go against the Chinese if you develop alternative technologies,â€ said Shyam Mehta, a solar analyst with GTM Research, a renewable-energy market analysis firm.