China Solar Advantage
Don't Blame China For Our Own Incompetence
Last year, SolarWorld AG filed a complaint with the Department of Commerce to counter low-cost solar imports from China.
SolarWorld claims that China's subsidies violate global trade rules and provide Chinese manufacturers with an unfair advantage.
They're right in that China offers huge subsidies for its solar industry. But is it unfair?
Certainly if you can't pump out solar panels cheaper than a heavily-subsidized manufacturer in China, you're not going to be happy. And I can't say I blame you.
But before we start throwing stones at China, let's remind ourselves that for years, we did a very good job at hindering domestic solar development on our own. Thanks mostly to useless Washington bureaucrats and the special interests that have long controlled them.
As a result, China beat us to the punch. And they're doing it again with wind energy, too. While lawmakers debate over what amounts to pennies offered in the form of a production tax credit for wind, China's also now becoming the largest manufacturer of wind turbines.
I have to be honest. From where I sit, it looks like we consistently missed some opportunities here, and perhaps we need to look in the mirror before we start demanding unreasonable tariffs and start a very dangerous trade war that could actually hurt the domestic solar industry even more.
In fact, just today we learned that more than 50,000 U.S. jobs could be threatened by tariffs on Chinese solar-energy equipment that some American companies are now seeking.
This news was released in a report by the Brattle Group, which published its data in response to the original SolarWorld complaint.
According to the report, 100 percent tariffs would result in 50,000 lost jobs and $698 million to $2.6 billion in losses to consumers. Tariffs of 50 percent would cut as many as 43,000 jobs.
Jigar Shah, founder of Sun Edison responded to the report by saying. . .
“We cannot allow one company's anti-China crusade threaten the U.S. solar industry and tens of thousands of American jobs.”
Shah has been very outspoken on this issue, and earlier this year offered a pretty solid argument to the Managing Director of Cleantech Research at AURIGA Securities. Take a look:
"I write to you not from one trading desk, but representing the 1,000 or more rooftops where I have deployed solar.
I write to you representing more than 97 percent of the U.S. solar industry. These are the people who have not only visited factories where solar panels are manufactured, but who have actually worked in those factories, and many more who have worked assembling, installing, and maintaining solar systems.
At a trading desk, one is managing portfolios, trading prices of commodities like solar panels and more. You may even be concerned about the cost of silicon chips used in computing (but we are not complaining about the low cost of silicon chips manufactured outside the U.S. in this dialogue).
Every day, we, the actual people who work in the solar industry, are interested in growing the deployment of solar, particularly at a cost that creates grid parity, location by location. More importantly, we are interested in preserving and growing the 100,000 American jobs in the industry, which, according to the 2011 National Solar Jobs Census published by the Solar Foundation, grew 6.8 percent between 2010 and 2011 -- nearly ten times higher than the national average employment rate
of 0.7 percent.
Real jobs. Real people. Using real tools.
By the way -- on the theoretical stuff, many of your colleagues disagree with you and might provide you with a bit of insight and education. See below:
Photon Consulting: “Overall, trade restrictions between the U.S. and China will destroy value in the global PV sector. Equally important, imposition of artificially higher prices for solar consumers would undoubtedly slow the adoption of solar power in key markets such as the US.”
Jefferies: “The U.S. solar industry, already suffering from a lack of financing, will experience higher module prices and lower demand if countervailing duties are imposed as early as March 2012.”
Axiom: “There is simply more supply than there is demand," Johnson said. "It's very simple economics." And it's not the Chinese's fault, Johnson said: "You can't complain because a guy is beating you," Johnson said.
AEI Research: “Higher module prices are likely to lower the excess return, putting solar energy at risk of losing years of economic potential as a result.”
SEMI: “This case could lead to significant price increases that could have a significant deleterious impact on SEMI members, many of whom are upstream providers of high-value-added equipment and materials. It will also impact downstream service providers, such as installers, where a majority of solar industry jobs are concentrated."
I'm sure there are plenty of folks who will disagree with me on this. And that's fine. But I maintain that while we blame others for our own complacency and incompetence, others are capturing more and more market share of what is certainly to be one of the greatest investment and growth opportunities of the 21st century.
This is simply unacceptable.
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