Photovoltaic Solar Import Duties: Stop Me Before I Save Your Environment!

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Everyone loves photovoltaic solar panels. They take energy from the sun and transfer it directly to your home, place of business or even into the many car batteries in a mobile home. Thanks to advances in thick chrystalline silicon PV technology, they can harness more of the sun’s power than ever before and use it to light or heat your home. More cutting-edge thin-film panels can provide even more electrical power.

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Despite the travails of Solyndra and other “green collar” companies that President Obama promised would create millions of new jobs, solar is actually a success with the solar industry now supporting jobs for 140,000 Americans and, thanks to incentives and tax breaks, it has expanded beyond the sunny west and is making inroads even into Northern climates where silicon PVs were once thought to be impractical and easily ruined by too much snow and rain.

The boom started in the early 2000s as cheap panels from China, which has been heavily subsidizing solar manufacturing, made their way back to the US. Those Chinese panels were good not only for American customers, but for US companies that install solar panels. Elon Musk–backed SolarCity has grown explosively by installing Chinese-made panels on US homes and businesses, often through financing mechanisms that require no money down.

But it might be ending soon. The Department of Commerce will rule today on whether or not it will place duties on imports of certain crystalline silicon photovoltaic products (translation: PV panels). Commerce was petitioned by SolarWorld Industries America, the US arm of a German company, Solarworld AG. If import duties are, indeed, placed, the Chinese panels they could sharply go up in price and China would then place its own tariffs on US-manufactured polysilicon, a key ingredient in those panels.

This sets up almost a proxy war of protectionist interests all claiming to stand up for the American consumer. SolarWorld is a German company using its US subsidiary to try to cut off the flow of Chinese panels. On the other side are small US solar panel installers that rely on less costly Chinese goods from Sharp and other Chinese manufacturers‘ panels to install on US homes. A German company is asking for import duties to stop Chinese companies from giving installers and consumers cheaper alternatives to more expensive silicon… and China can turn around and place import tariffs on the silicon that goes into making the panels in the first place.

Confused yet? You should be. As Slate.com senior technology writer Will Oremus puts it: “The U.S. government wants Americans to buy solar panels, and it subsidizes those purchases through rebates and incentives. The Chinese government wants Chinese companies to build solar panels, and it subsidizes their manufacture. And yet rather than celebrate this fortuitous arrangement, the world’s top economic powers find themselves on the brink of a trade war that could cripple a promising industry in both countries, kill jobs, and hurt the environment all at once.”

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