Solar Policy: Mixed Message Muddles Market

May 22, 2012 :

Hey, all. Here I am, fresh back from the World Renewable Energy Forum last week. Miss anything while I was gone?

*Pause*

OK, OK — yeah, I heard. Groundbreaking news came down from the U.S. Department of Commerce last week in SolarWorld’s anti-dumping complaint, and boy, does it muddle U.S. solar policy in ways that confuse me.

(At this point, I must take a moment to offer major congratulations and thanks to my immensely talented associate editor Kathie Zipp, who did yeowoman’s work last week chasing down this story while I dealt with some family issues. She did an absolutely fantastic job, and she often doesn’t get enough credit for the work she does — you can thank her at kzipp@wtwhmedia.com. Thanks, Kathie — you’re a pro’s pro.)

I must admit, however, that I was shocked by how harsh the penalties were on Chinese solar panel manufacturers. Based on the initial decision in March on the first part of SolarWorld’s complaint, I was expecting the anti-dumping tariffs to be equally mild. So my jaw dropped when Kathie sent me her story and I saw that the tariffs ranged from 31.14% to 249.96%. Um, all I can say is, “Wow.”

I find this news confusing.

As you know, I’m on the record as supporting taking some action to protect U.S. manufacturing jobs in the solar industry, but I understood both sides of the argument. When the decision came down, I thought the Department of Commerce made a wise decision — mild tariffs on Chinese companies that could help to level the playing field. But the subsequent decision last week hammers the Chinese companies harshly.

Steve Grippi, business development director for Clenergy America, talked to Kathie last week, but his comments deserve wider dissemination:

We racking companies aren’t penalized directly, but the projects we are working on won’t happen. We have many projects that are completely on hold right now. We put in the racking but now there may not be panels to go on them. Tens of thousands of jobs are now on hold from installers, system integrators and engineering companies. This decision is counterproductive. We’ll survive, but we’re scared.
And here’s another:
Actually, the cost of U.S.-made solar panels is now about equal to Chinese panels with the tariff. The problem is that the U.S. doesn’t have the manufacturing capacity to fit the demand now. We may in 3 to 5 years, but by that time billions of dollars and thousands of jobs will be lost. In China you can build a plant in three months because of their subsides and government policies. Here, there are so many restrictions, it takes 3 to 5 years to build them. Without any projects, we won’t even have the revenue to build these manufacturing plants.
I believe Grippi makes some excellent points on both fronts (including the restrictions on building solar manufacturing plants here and, of course, the overwhelming support that the solar industry gets in China from its government — if only we could get that kind of support here in the United States).
But what really worries me about the two decisions, when taken in tandem, is that it sends a definitively muddled message, both to Chinese companies and U.S. companies. What the solar industry needs more than anything else (something I’ve screamed about for months) is stability. The inconsistency of these two decisions does not help that — I wish the Department of Commerce would have chosen a side and stuck to it.
  • Anon

    DoC doesn’t choose sides…it uses provided data and mathematical equations to determine a result. It is supposed to be separated from political realm…as separated as a murder trial. Politicians set rules (laws) and policy. The judges and Lawyers interpret the laws. All of those who look at this as a political scenario are ignoring the fact that this whole action was the only recourse solar manufacturers had to play the game…scratch that…to stay in the game.
    all of those who think that the trade case was a first salvo in a trade war, seem to ignore the fact that being dumped on is bad for an economy in the long run, and the trade case was a REACTION not a first action. We can’t shell out sentences without a crime being committed. I would be happy to have the Chinese manufacturers come to the US and open up module and cell plants and compete directly with US manufacturers. The bigger question for me (solar aside) is why are Chinese product so much cheaper? What is the actual cost for that “cheaper”? Who pays? We’ve had over 100 years not asking that question and ended up with gas guzzling, smog producing, climate changing hazzardous crap to deal with…and our kids to deal with. We won’t fix it by not asking the questions.
    Frank, I am confused. Are you shocked that they were so high because the judges should have been lenient on first offenders? (yeah right), or shocked that the limited evidence provided warranted such a high tarrif?

    How many of the folks opposed to the tarriff’s action wouldn’t hesitate to jump on the other side of the legal fence when they have to compete with a company who highers illigal immigrants to keep thier install prices down? Would the argument be because it is illegal, or because it effects your wallet? My guess is EVERYONE in this divided argument has chosen a side based on thier wallet…period. This includes the incorporated United States of America and China Co. All other arguments are fluff.

    Regarding your consistancy request for the Solar Market. We have consistancy. We have been consistently inconsistent for over 40 years, since before solar was installed and then removed from the whitehouse by Carter/Reagan. th