This war has been brewing for some time and yesterday several US solar manufacturers fired the first shot at their Chinese rivals. The gist of their grievances is that the Chinese government has subsidized solar manufacturers in China. These manufacturers have unfairly have lowered their prices on solar modules and are dumping them in the United States., driving US manufacturers out of business.
One thing is for sure. Manufacturing of solar modules in the US has become increasingly scarce. OregonLive quotes the lead US manufacturer in the complaint against the Chinese as saying that in the last 18 months, seven U.S. solar plants have closed or downsized, eliminating thousands of manufacturing jobs in Arizona, California, Massachusetts, Maryland, New York and Pennsylvania.
China has assumed the lion's share of global manufacturing of solar panels, and just this year has shipped more than $1.6 billion of solar panels to the United States. Wholesale prices for solar panels have dropped by about 30 percent since the beginning of the year.
The Chinese government does provide huge support to Chinese solar manufacturers. Jonathan Silver, executive director of the Energy Department's loan program, told a congressional panel September 14 that China provided $30 billion in credit to its biggest solar manufacturers last year, about 20 times the U.S. effort.
A coalition of seven US manufacturers of solar panels filed the trade case yesterday, with SolarWorld Industries America Inc. leading the charge. The other six manufacturers are allowed to remain anonymous. SolarWorld itself is a subsidiary of SolarWorld Industries, a German company. The coalition seeks tariffs of more than 100 percent of the wholesale import price of solar modules from China.
It is an irony that never ceases to amaze that US consumers love US manufacturers, but when it comes to reaching deeper into their pocketbooks, they may not love them quite as much as they thought. As The New York Times notes, if this trade action is successful, US consumers may have to spend more money for solar panels that they put on their homes.
According to the Times, "The filing, which the Commerce Department must review under federal rules, is certain to be controversial. For one thing, if successful, it would drive up the price of solar energy in the name of trying to breathe life into a flagging American industry. High costs have already kept solar power from becoming more than a niche energy source in the United States."
And the Times also notes that the action may be too little too late. "Wednesday's filing could prove too late to save the American solar panel industry. China already accounts for three-fifths of the world's solar panel production, giving it enormous economies of scale." Although the solar industry is expanding rapidly in China, 95 percent of the solar panels China produces are for the export market."
The petition has also put a wedge into the major trade association of the solar industry in the US, which represents both US and Chinese manufacturers. The trade case has spawned a new organization called the Coalition for American Solar Manufacturing.
The solar trade wars are just starting to heat up and before the dust settles, there will be huge changes in this market in the months and years to come.