The solar trade war we’ve been quietly waging with China is about to get ugly. Didn’t you know there’s a solar war on? Well there is, and here’s how it started:
It was a crisp Spring day like any other in Washington D.C. Then, suddenly, SolarWorld, the American arm of a German company, persuaded the Commerce Department to levy a tax on imported solar panels from China. Why? They charged that China was “dumping,” or heavily subsidizing solar panels in order to make them artificially cheaper than the free market could bear. U.S. manufacturers, or European ones for that matter, couldn’t compete with the uber-low priced panels getting pumped out of China.
And American solar makers were failing because of it. Ever heard of Solyndra? That was a high-profile company seriously hurt by plummeting panel costs (and also because it was reportedly terribly managed). And so the U.S. agreed that a tariff was in order. China, for its part, protested. It called SolarWorld an “agent provocateur,” but that didn’t slow it down.
Flush from victory, SolarWorld was soon pushing the E.U. to start taxing imported panels there, too. So China retaliated. It imposed a tariff on U.S. imports of polysilicon. It also claimed that 6 renewable energy projects built on U.S. soil were “illegally subsidized.”
Which about brings us up to speed. Yesterday, according to China Daily, “the US International Trade Commission determined that imports of crystalline silicon photovoltaic cells and modules from China have hurt the US solar panel industry.” And whatever might that mean? It means the tax will stand: “The decision paves the way for the US Commerce Department to impose tariffs of up to 36 percent on Chinese solar panels.” Emphasis mine, because, well, that’s huge.
And it’s where things stand to grow complicated. The U.S. solar industry is deeply split over such a decision. Yeah, it means that American-made solar panels will have a better shot at competing with the Chinese behemoths—China’s Suntech is the biggest solar manufacturer in the world—but it means that homegrown solar marketers, distributers, and installers will now see prices for solar arrays skyrocket. At a time when the industry is already fragile, and home solar systems are largely available only to the well-off. Without innovative leasing programs, state incentives, or crowd-funding ventures like Solar Mosaic, solar is simply too expensive for the average American.
Which is this whole thing is madness; the entire world benefits from cheaper solar panels (well, except maybe the poorly paid day laborers at Chinese plants). And cheap renewable power sources are pretty much the order of the day; they’re integral to combatting that little pest called climate change. It should be a common aim between nations to bring prices down for solar, wind, and other clean energy producers. And that’s exactly why this burgeoning trade war stands to be so counterproductive—China could retaliate by taxing imports on U.S. clean energy goods.
Edward Barbier, an economics professor at the University of Wyoming, told China Daily that the tax could lead China to “retaliate with tariffs on other clean energy imports, such as wind turbines, solar batteries and biofuels.” That would be a disaster. Again, these two nations in particular need to cooperate to bring clean energy costs down—U.S. has the lead in research and innovation, China has the leg up on manufacturing. We’re in a prime position to work together to supply clean, renewable power to the world, instead, we’re starting a trade war.
Clean energy is all but assured to become the next great industry of the world, so it’s not really surprising that the U.S. and China are vying for the upper hand. Billions of dollars are at stake. So is the question of who will dominate a sector whose prominence will eventually eclipse Big Oil. But we’re not there yet. And this prickly trade spat could turn back the clock right when we need to be laying on the accelerator. So here’s a thought. If the U.S. is oh so concerned about China unfairly dumping cash into solar manufacturing, how’s about we do the same? Fight solar with solar. Make affordable renewable energy, not war.