First Solar lays off 30% of Workforce, Govt Subsidies Critical to Renewable Expansion, House Passes Keystone Bill

Solar manufacturers, which expanded rapidly to meet double-digit demand growth in the past decade, are struggling mightily these days.  Not only is  U.S. Congress balking at tax subsidies, but governments in Europe are doing the same.  The plunging  natural-gas prices make renewable energy less competitive. First Solar recently laid off 30% of its staff, demonstrating the even the biggest solar panel makers aren't immune.  In the last year, 4 U.S. and 4 German solar companies filed for bankruptcy.  The largest producers in China say their profits will slump this year as shipments grow.

In fact, U.S. federal spending on clean energy will drop 75 percent by 2014 from a 2009 stimulus-related high which could lead to bankruptcies and market consolidation.  A recent report, 'Beyond Boom and Bust' by a group of analysts from the Brookings Institution, Breakthrough Institute and World Resources Institute outlined likely changes to clean tech  markets due in large part to declining federal subsidies.  This report also delineated targeted policy reform on sectors that will experience the most financial difficulty.

As expected, the House passed the combination transportation and keystone bill by a vote of  293-127 yesterday.  It goes to the Senate where the Republicans are optimistic about their ability to get this Keystone infused transportation bill through.  The Administration and Senate leadership have a completely different view and it remains to be seen the ultimate outcome.