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The Solar Trade War Demystified

The Solar Trade War Demystified

NOTE: This is a guest post by Erica Etelson, a blogger for Mosaic, an online marketplace for investing in solar. Follow her at @iluvsolar.

Recently, the U.S. Commerce Department imposed tariffs on $3 billion a year worth of Chinese solar panel imports. Non-Chinese solar panel manufacturers contend that China is able to “dump” cheap panels on the global market thanks to lavish Chinese government subsidies. This imbalance compounds the unfair advantage Chinese manufacturers already enjoy thanks to its huge low-wage workforce.

It’s a complicated, wonky issue even for solar geeks like me, and there are compelling policy justifications for and against the tariffs. Below is a pros and cons cheat sheet so you can be the big expert at your next dinner party, but let me first offer this key context, which the technocrats often lose sight of: in any sane debate concerning energy, climate change must be the trump card, and China is the mega-nation that will make or break global efforts to cool the planet.

Solar Tariffs: The Pros
- The Chinese solar industry is undermining US solar manufacturing by flooding the market with cheap panels, and tariffs could help level the playing field.
- Instead of dumping panels on the global market, China can and should install them domestically.
- Cheap PV panels stifle innovations like thin film solar.

Solar Tariffs: The Cons
- Most solar industry job growth in the US is not in manufacturing, but in finance, engineering, installation, sales, marketing and customer service.
- Cheap solar panels make it possible for the 99% in the US and Europe to go solar. In effect, cheap panels are making solar competitive with coal.
- Cheap solar panels make it attractive for businesses and schools to go solar.
- If the Chinese solar industry falters, US installers will be dealt a major blow.
- Tariffs will dampen China’s solar industry and obstruct China’s goal of installing 15 GW by 2015 (50% more solar than the US is predicted to have). Even if China utilizes the current surplus for its own electricity needs, the long term prospects for manufacturers will be clouded.
- Global panel manufacturers increasingly seek to locate factories close to booming solar markets so as to minimize shipping costs. So we can expect a growing manufacturing base in the U.S. even without tariffs.
- If the Chinese government and banks want to subsidize their solar industry, we should rejoice. As one Beijing-based renewable energy consultant put it,  ”If you buy a solar panel from China, China is paying for part of it. If I were the U.S., I would let Americans milk it.”
- If the US wants to level the playing field with China, it can redistribute fossil fuel subsidies to the solar industry.

I really did try to give the pro-tariff point of view an equal number of bullet points but, at the end of the day, we’re playing a win-win, lose-lose game with China — either both nations nurture their solar industries and stave off climate catastrophe or we keep squabbling our way to a slow boil.

 

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63 comments

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12:19PM PST on Nov 25, 2012

helpful article with pros and cons. They shoudl all be like this.

11:23PM PST on Nov 17, 2012

I think I have got this correct. During the week here in our daily paper in Melb. Australia it seems now that those who decided or let me say ran to get solar panels on their house thought they would save money. Well it appears now that too many people DID opt for the solar panels and seeing solar companies/Govt have reeled in this decision. Why? Well many opted for lots of panels which is returned to the grid and in doing so they save money which they actually receive in cold cash into their accounts. So because of all these people returning electricity to the grid and not actually using any, if you get what I mean, then it appears or seems that the electricity companies arent earning enough money AND those without solar power, is forcing costs up to those without solar panels. So they all got burnt b/c now not only did they pay huge money for the panels they have to pay for their electricity too at a certain amount. So be careful and get down into the nitty gritty first before you put your hand up and spend thousands and thousands of dollars on solar power AND dont forget what you pay out takes years and years to recoup b/c now you have to also pay for electricity. It appears a rort. like our roof insulation scheme. Geez that was terrible too oh and re solar panels, some houses have gone up in flames. So everyone.......... be careful and also our Smart Meters HERE ARENT SO SMART EITHER...GEEz, BE ,,C A R E F U L okay

7:25PM PST on Nov 15, 2012

Interesting point to say we could benefit form the money the government in China is putting in to making the panels cheep. I'd like to see pervasive inspection: with pet food and infant formula and sheetrock, products from China have been cheap and dangerous.

1:49PM PST on Nov 14, 2012

i went solar it took a few years buying one at a time as i could afford it now i am happy for i don't pay electric bill with my solar and wind power if you can swing it do it go green

10:39AM PST on Nov 8, 2012

Just an FYI for those of you concerned abou the quality of Chinese-made panels -- a 25 yr. warranty is the industry standard, regardless of where the panels are produced, and many installers expect the panels to last 40 yrs.

10:33PM PST on Nov 6, 2012

Thank you.

3:23PM PST on Nov 5, 2012

Thanks.

3:35AM PST on Nov 5, 2012

Thanks.

10:13AM PST on Nov 4, 2012

Thanks.

8:38AM PST on Nov 4, 2012

Thank You for the Information!

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