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Two US manufacturers who represent 20% of US solar panel production capacity filed for bankruptcy. This has raised questions about the ascendency of China in the renewable energy technology industry. The US manufacturers made a strategic error by betting on being the low cost producers of a product component that has fallen in cost by 80% due to expansion of the solar panel market. They are also a victim of the difference in the ways that the US and China subsidize the industry. The US provides a 30% price subsidy to consumers, while China subsidizes it manufacturers. Many of the solar panels purchased in the US, with consumer subsidies, are produced in China. China no longer depends upon cheap labor in this industry because it is not labor intensive. It is betting on developing the best product and manufacturing technologies and capturing the export market for its products. The US and Germany have seen their positions in this market erode against China.
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