US Investigating Chinese Solar Imports

Photo by: Living Off Grid

China’s new energy manufacturing sector has been growing rapidly in the last two years. In 2009, there were $640 million in U.S. imports of Chinese solar. Last year that amount grew three times that amount to $1.5 billion. U.S. solar manufacturing however, has been struggling.

SolarWorld Industries America, Inc., joined by other American solar manufacturers, alleged in a petition to the Department of Commerce that they have suffered financial injury and requested tariffs to be imposed on Chinese solar. The Chinese government allegedly provides preferential loans, land discounts, discounted raw materials, tax breaks, export assistance grants, and export insurance to domestic solar companies. The claim is that illegal Chinese subsidies result in artificially low prices that are unfairly disrupting sales of American manufactured cells. The scale of the Chinese subsidies may violate World Trade Organization (WTO) rules. The requested tariffs on Chinese solar panels, which could potentially exceed 100%, are intended to level the playing field to allow the struggling U.S. solar manufacturing sector to compete.

U.S. solar generating companies and the Coalition for Affordable Solar Energy oppose the potential duties. The Coalition has 25 members, including U.S companies, Solar City and MEMC Electronic Materials Inc., as well as Chinese companies with U.S. arms such as Yingli Green Energy and Suntech Power Holdings. There is criticism that the tariffs will cause prices for solar to rise, making solar projects too expensive. In response to the potential action CECEP Solar Energy Technology Co. Ltd., China’s largest solar power developer, put $500 million worth projects on hold in anticipation of the foreboding rise in costs.

Instead of imposing tariffs on Chinese solar, the U.S. should provide new legal subsidies to domestic solar manufacturers. The 1603 Treasury Cash Grant Program for renewable energy projects is sunsetting in a few months. If the U.S. wants to be a part of the green energy future, incentives like these need to be extended and expanded. Inciting a trade war will not be the solution to growing solar in the U.S.

On December 5th, the ITC will vote on whether there is sufficient evidence of injury to U.S. manufactures such that a case should go forward. In January, the Commerce Department will make preliminary decisions on whether to impose the duty on Chinese-subsidized solar panels.