Cutting Off China’s Silicon Nose to Spite US Solar Panel Installers’ Faces

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Earlier this year, the Commerce Department imposed steep duties on importers of Chinese solar panels made from certain components in a valiant effort to protect US manufacturers… based in Germany.

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Friday, Commerce doubled down and announced even more import duties on silicon photovoltaic products- including cells, modules, laminates and/or panels – that might be used in production of solar power from China and Taiwan.

Commerce initially determined that crystalline silicon photovoltaic products from China and Taiwan have been sold in the US at dumping margins ranging from 26.33 to 58.87 percent, and 27.59 to 44.18 percent, respectively. China’s Trina Solar faces total import duties of nearly 30 percent and Suntech Power nearly 50 percent as a result of the decision. Taiwanese producers face anti-dumping duties of up to 44.18 percent, with the highest rate applying to Motech Industries “Dumping” occurs when commerce determines that a foreign company has received state subsidies to sell its products at a lower rate there.

Yet these decisions are really just a small part of a long trade dispute between the Chinese solar panel manufacturers and SolarWorld Industries America, the Portland, Ore.-based subsidiary of German parent company, SolarWorld AG based in Bonn. SolarWorld is making the complaints and our regulators are valiantly protecting Germany’s right to do business here. They are World Cup Champions, after all.

To be fair to SolarWorld, the company does make crystalline silicon solar panels in Oregon even though the bulk of their business empire is in Bavaria and nearly all of their employees would rather have a nice Bittburger or a Spaten than enjoy the finest microbrews coming out of Portland. Their complaints center on the fact that Chinese manufacturers have dodged duties imposed against the panels, themselves, by shifting production of the cells used to make their panels to Taiwan. But should that even matter? Should there be duties on products US customers want that can be manufactured at a cheaper rate overseas simply because SolarWorld wants to protect its higher US prices?

The Solar Energy Industries Association does not think so.

“Free trade and open markets encourage deployment of solar power worldwide,” SEIA said in a statement after the initial panel duties were imposed. “SEIA recognizes that growth in the global supply chain benefits both American manufacturers and consumers. Increased tariffs on solar energy products and allegations of dumping reflect the challenges of a maturing industry. The United States, China, and all economies will realize the benefits of solar power through fair competition and free trade”

These determinations are bad for the burgeoning solar power industry here. Solarworld is trying to protect higher prices for its products and most of that money will go directly back to Bavaria in one form or another. Meanwhile, the bulk of the Chinese and Taiwanese panels are resold by US installers. Local installers prefer the Chinese products not just because of the price difference but because they allow flexibility in how they are used in homes and businesses.

This would be like Russia’s trade ministry siding with a big US multinational operating there and against Russian installers who would rather purchase the Chinese silicon products than deal with the big multinational. Remember, too, that China gets most of the silicon to create these products from here in the US so they can simply turn around and place tariffs on US silicon, as well, and the more duties we place on finished products coming back here, the more likely that becomes. Cutting off customers of our silicon industry to protect Germany’s solar industry makes about as much sense as cutting off your nose to spite your face. Or, in this case, cutting off your own nose to spite someone else’s face.

 

 

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