Why Australia Stopped Manufacturing Solar Panels – Watts Up With That?

Guest essay by Eric Worrall

According to the Australian educated founder of the Chinese solar industry, “I really didn’t have much confidence in running a business over there”.

The world is hungry for solar panels. Why did we stop making them?

ABC Science / 

By technology reporter James Purtill
Posted Yesterday at 5:00am, updated Yesterday at 6:38am

Given we have the highest uptake of solar in the world, you might expect that some of these panels would be made here.

But with a few exceptions, that’s never the case.

Twenty years ago it was different: Australia appeared set to be a global player in the small but promising industry of manufacturing panels that could extract energy from the sun.

And then everything changed.

Over 20 years ago, the Harbour City was preparing to host the Olympic Games and the BP Solar factory was in full swing, making solar cells that were assembled into panels and then installed at the athletes’ village, promoted as one of the largest solar suburbs in the world.

But less than a decade after the 2000 Olympic Games, the factory closed.

Many of the leading lights of the UNSW research team moved to China, where they set up the country’s first solar PV factories.

Dr Shi completed a PhD under Professor Green in record time and then stayed on in Sydney to do more research.

He took a gamble in 2000, moving back to China to found a solar manufacturing company, Suntech.

When I was in Australia, I was just a scholar and a student. I really didn’t have much confidence in running a business over there.

“Also the cost of labour in Australia is fairly high.”

Cheap Chinese panels largely wiped out the local solar manufacturing industry.

Read more: https://www.abc.net.au/news/science/2021-09-19/solar-panels-why-australia-stopped-making-them-china/100466342

The cost of doing business is a big problem in Australia. This time that cost hurt us big time. Australia could have been the global centre for solar manufacturing, but we missed out because one brilliant Australian educated Chinese scientist was put off by the problems he would have encountered setting up his solar panel business in Australia.

There is another problem Dr. Shi didn’t mention directly. Australia has very high energy costs.

In China’s coal powered economy, energy is very cheap. Under the last years of President Obama and under President Trump, US energy prices became competitive; the US fracking driven manufacturing boom, the job reshoring phenomenon, proved that the cost of energy is a crucial factor in decisions of where companies build their factories. And there are few processes which are more energy intensive than manufacturing solar panels.

It wasn’t always this way. Australia enjoyed a manufacturing boom for much of the later half of the 20th century, largely because of our cheap coal powered electricity grid. Then in the early 90s the Aussie government became obsessed with wind and solar, and government bureaucracies started seizing ever greater control of business affairs through a deluge of new regulations, and it all went to hell.

Now we have high energy costs, a high cost of doing business, and an economy which is absolutely not the first choice for entrepreneurs choosing a good place to start out or create new manufacturing jobs.

Some entrepreneur friends moved to Canada just before the Covid outbreak, for easier access to Canada and North America’s capital markets. Their product could become a new social media sensation. Leaving Australia was an absolute condition of receiving the investment they needed; the Angel investors they were negotiating with did not believe their business had a reasonable chance of succeeding if they stayed in Australia.

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