West losing out to China on solar power technology

China is emerging as the dominant force in the manufacture of solar panels in a world desperate for renewable sources of energy, as collapsing prices and disillusion over government subsidies has hobbled US efforts to take a lead in the development of the new industry.

Prices of solar panels have fallen by more than 40 per cent in the past year, as a result of increased manufacturing capacity and disappointing demand, and the US was reeling yesterday from news that taxpayers may have lost more than half a billion dollars on one solar energy firm that shut its doors this week.

Solyndra, whose plant was visited and praised by President Barack Obama last year, said it would file for bankruptcy protection in the next few days, making it the third US solar firm to go under in the past month. Solyndra had been the beneficiary of a Department of Energy loan guarantee programme funded by the Obama administration's economic stimulus in 2009, and loans from the Treasury department. In all, $527m (£326m) in taxpayer funding had been advanced to the company, along with about $1bn in private sector investment. More than 1,100 employees were told this week that they would be losing their jobs.

"This was an unexpected outcome and is most unfortunate," Solyndra's chief executive Brian Harrison said. "Regulatory and policy uncertainties" made it impossible to raise capital to quickly rescue the operation."

Also last month, Evergreen Solar, a Massachusetts firm which had once been a stock market darling, and SpectraWatt, a private firm spun out of Intel, said they were filing for Chapter 11 bankruptcy protection.

Congressman Henry Waxman of the House Committee on Energy andCommerce said the bankruptcies "are unfortunate warnings that the United States is in danger of losing itsleadership position in the clean energy economy of the future. We should be doing everything possible to ensure the US does not cede the renewable energy market to China and othercountries."