Earlier this week Suntech Power Holdings, China's largest manufacturer of solar panels, announced its plan to build a new production facility in Goodyear, Arizona. According to Solar Daily, the new production plant will be Suntech's first manufacturing outlet in the United States:
The Suntech Goodyear factory will initially employ more than 70 local residents and is designed as a showcase for the company's latest-generation solar electricity manufacturing technologies and equipment. It will begin with a production capacity of 30 MW and has the potential to expand to over 120 MW, giving Suntech the ability to respond to the rapidly growing demand for solar throughout the United States.
Arizona State officials hope that Suntech's latest American undertaking will help launch their state into a regional center for renewable energy technology. "I am pleased to welcome Suntech to Arizona, and commend the company for choosing Goodyear as the site for its solar manufacturing operation," announced Arizona governor Jan Brewer. "I am very serious about establishing Arizona as a leader in the renewable energy sector - we offer a strategic location with a highly skilled workforce, low payroll taxes, and, now, the right incentive program to make business sense."
While the new Suntech factory promises to bolster domestic production of solar technologies, building the Arizona-based plant may be the company's attempt to sidestep protectionist measures on solar panels imported to the United States. In September of 2009, the New York Times reported on a letter from US customs officials describing a recent tariff on Chinese solar panels:
The panels had become too sophisticated to qualify for duty-free import. Instead - because the panels contain a basic electronic device for safety and energy efficiency - they would be treated as electric generators, subject to a duty of 2.5 percent.
Importers might also be liable for duties on all solar panels brought into the United States in the five years before the ruling if customs officials decide that the companies were guilty of "material misstatement or omission" for failing to notice sooner that solar panels had evolved to the point that they no longer met duty-free rules.
Chinese companies, like Suntech, may avoid such tariffs if they move the final assembly of their panels to a facility within American borders. According to the New York Times report, 90 percent of the new workers in the Goodyear plant would be blue collar laborers, welding together solar wafers that have been produced and engineered in China.
Suntech is currently the world's third largest producer of solar products, behind First Solar of Tempe, Arizona and Q-Cells of Wolfen, Germany. Benefitting from cheap electricity in China, low labor costs, and robust support from the Chinese government, Chinese solar energy companies, like Suntech, are gaining momentum in the global solar industry. Suntech forecasts substantial growth in the first quarter of 2010, and with its new Goodyear facility scheduled to open this September, the company hopes to capture a burgeoning share of the American renewable energy market over the next five years. If the Obama administration is serious about creating high-paying renewable energy jobs for American companies, it must act quickly amid increasing challenges from abroad.