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Generous solar subsidies were never going to survive in an age of austerity and cheap natural gas. Nowhere is this more apparent than in Germany. Solar energy was supposed to herald a new age of clean energy, and provide thousands of green jobs. But not a single solar manufacturer is expected to survive there. With governments like Italy also ending their tax payer funded bonanzas, the industry is facing total collapse, globally.

A massive glut of manufacturing capacity - the solar industry sold only 40% of its total solar module capacity last year - is driving down prices. Price falls may be good for power plants, but given the technology's limitations it is doubtful whether prices will ever drop low enough to make solar a viable energy option without government subsidies.

This is because shale gas has upended the economics of electricity, in the U.S. and elsewhere. Renewable energies just can't compete, but none less than solar. Even with subsidies, solar projects in the sunniest regions can't compete with efficient natural gas plants. Gas-fired generation jumped 40% in the last year alone, increasing its share to 29.4% of America's energy needs.

The failure of Obama's green energy revolution has been well publicized given the controversy surrounding the bankruptcy of solar panel manufacturer Solyndra, and the Federal money it received - to protect a big Obama donor - even when it was known the company would fail. Public investment in clean energy appears to have been "nothing but a way to shovel lucre to politically influential producers."

So, how long then can U.S. solar industry last, when President Obama has made dirt-cheap natural gas a cornerstone of his energy policy? For now the Department of Commerce is attempting to protect solar manufacturers by imposing tariffs on subsidized Chinese solar panels that are imported into the U.S. - at the expense of plant operators. But judging from America's largest manufacturer, First Solar's (FSLR) $450 million loss in the first quarter - and $10 billion loss in market capital in only one year - it looks like a lost cause. It can't be long before budget imperatives and logic prevail, as it has in Germany.

As the Angry Analyst predicted last year, in "The West's Manufacturing Continues To Pay For Green Gesture Politics," soaring household bills would force politicians to abandon renewable energy. The €100 billion Germany has committed to solar subsidies over the next 20 years has made German electricity the most expensive in Europe, and 15% or so of German's are now struggling to pay their bills. Fighting for her political survival, Chancellor Merkel has pulled the plug.

Solar feed-in tariffs were slashed by 30% for existing plants, and abolished entirely for new industrial-scale plants. A death sentence for the industry, not a single Germany solar manufacturer is expected to survive the next few years. In recent months, Q-Cells, once the world's largest producer of solar cells, has filed for bankruptcy, along with Odersun, Solon, Solarhybrid, Solar Millenium, and Scheuten Solar.

The question now is can even the Chinese solar industry survive? China, the world's biggest maker of solar panels, has just cut its Golden Sun program, which funds solar power generation projects, by 21%.

Source: Solar Power Has Been Totally Eclipsed By Gas