Solar PV & Renewable Energy prices

Why US Solar Manufacturers are Going out of Business – Part 2

Read Why US Solar Manufacturers are Going out of Business –

Role of the US government in domestic solar industry:

At present the US government is taking a stance on protecting the domestic solar industry against unfair competition from the Chinese by imposing punitive import tariffs that will be as high as 240%. While this may deter some of the Chinese manufacturers from dumping massive amounts of solar panels into the US market and may force them to raise their prices, it is questionable whether this strategy will help save the domestic industry in the long run.

While taxing foreign competitors will help, it is unlikely that US manufacturers will be able to compete effectively with the Chinese even if their do raise their prices. More importantly, US manufacturers are on shaky ground in terms of current and future government funding, and it is ultimately what they need to have a shot at surviving. Importantly, in 2011, the China Development Bank offered more than $30 billion in financing to Chinese solar manufacturers, which is about 20 times more than the amount secured by US solar manufacturers from the US government (source).

This is a big issue that will continue to divide the US government between those who believe that it is critical to develop the domestic renewable energy by pouring increasing amounts of tax dollars into start-up companies that may not survive in the tough market, and those who believe that this money should be funneled toward more important causes.

Domestic Solar Industry vs Available and Affordable Solar Energy

In moving forward on these pressing issues, the US government and the industry in general have some tough compromises to make and some important priorities to set. Is the goal to have a booming domestic renewable energy industry that will not only reduce dependence on foreign oil but also create jobs in America? Or is the goal to produce as much clean solar energy as possible so that it can be available at lower prices, reach more consumers and reduce our dependence on foreign oil anyway?

Chances are that for the US companies to remain competitive against their Asian counterparts, manufacturers in the solar industry will have to make the same move as manufacturers in many other industries i.e. textiles, computers, automobiles-move production overseas to Asia to take advantage of the cheap labor, cheap materials, lower taxes and lax environmental policies around manufacturing waste and pollution. In this case, we will be loosing our domestic industry as well in terms of jobs created here in the US, but we may be gaining more affordable prices of the solar panels. On the other hand, if we do not develop our own renewable energy industry, we will be in the position of dependence for renewable energy on China and other major Asian producers, which will not be much different than our dependence on foreign oil, with the exception of the fact that it is a clean, environmentally friendly source of energy.

Also it is imperative to take into account that over the last few years cheaper Chinese solar panels actually led to the growth and development of many domestic solar installation companies, who have seen a big boost in their business, have been able to hire more workers and to attract more customers. Still, lets not loose sight of the fact that solar energy accounts for only 1% of all energy used in the US and continues to be unaffordable for most home and business owners, running up a hefty price tag of $15,000-20,000 for the cost of the panels and installation on an average size 1,500 sq ft space. This means that the industry is in its infancy and requires a lot of financial support, research and development to get to a point where it can actually compete with fossil fuels for a significant portion of the market share. Clearly, the Chinese understand that the future is with solar, but the time to invest in it is now, as evidenced from heavy government sponsorship. The question is, does our government understand both the long term need and long term opportunity that lies with solar?

There are no easy answers to any of these questions, but one thing is clear- the US must take a strong stance on increasing the availability and use of clean renewable energy if we want to have a shot at saving our planet for future generations.

Levchik (Leo) is a renewable energy activist from Boston, MA, and has been involved with alternative energy and green construction since 2004.

In 2009, Leo and his green roofing company ( sponsored Boston’s Solar Decathlon Team, providing materials and installation labor to install a cool white roof on the top of Curio home (Joint effort by Tufts University and Boston Architecture College) – more info about the project here.

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Written by Levchik B

Posted on August 13th, 2012 at 11:54 pm

Posted in US Solar Industry

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