Renewables: India Calls on the WTO to Counteract U.S. Solar Subsidies

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“The biggest hurdle renewables have to overcome is not the cost of production, but the curse of intermittency. Where does the power come from when the wind doesn’t blow or the sun doesn’t shine?”

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Those are the words of MetalMiner Co-Founder Stuart Burns writing last month about how efficient and cost-effective energy storage could allow intermittent power sources such as renewables to play a baseload role in energy delivery. The U.S. Department of Energy is funding 75 projects developing electricity storage, funding research at Harvard, MIT, Stanford, and the elite Lawrence Livermore and Oak Ridge national labs in a bid for achieve a breakthrough. But haven’t we heard this all before?

Renewables_Chart_September-2016_FNL

Research has long been touted as the key to unlocking the potential of renewables for at least a decade now. There are plans for hydrogen bromide, zinc-air batteries, storage in molten glass, next-generation flywheels, to name but a few with many claiming “drastic improvements” that can slash energy storage costs by 80–90%, but it will be — at best — years before we see any of these technologies and work.

Our Renewables MMI dropped a point to 52 this month, reflecting the general low-demand market the specialty and rare earth metals used in solar panels and wind turbines are in. We remain skeptical that, even with such a research investment, that a breakthrough in energy storage is imminent. Existing technologies — such as Tesla’s powerwall home batteries — hold the most potential for renewable energy storage right now.

India’s Solar Panel Turnabout

Meanwhile, in an example of turnabout is fair play, India has decided to take its case against U.S. solar subsidies of photovoltaic panel companies to the World Trade Organization and the world’s largest democracy, honestly, has a good chance of winning.

The complaint alleges the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota prop up their renewables sector with illegal subsidies and domestic content requirements – an obligation to buy local goods rather than imports.

India lost a case at the WTO earlier this year after the U.S. complained about local supplier requirements to provide silicon photovoltaic panels for India’s massive new national solar power initiative. We said, at the time, that the U.S. might want to rethink taking the case to the WTO and even accepting the win.

Now, India is saying what’s good for the goose has to be good for the gander, and that the U.S. shouldn’t be able to subsidize its solar industry at the expense of Indian panel importers. It’s difficult to see how our nation will argue the exact opposite of what it said about free trade and market forces just one year ago when U.S. panel manufacturers were salivating over the prospect of providing of the 4,5000 megawatts of panels needed for three phases of India’s massive. Jawaharlal Nehru National Solar Mission and didn’t want India’s local subsidies to keep them out.

U.S. Protects its Interests in India

SolarWorld and several other U.S. panel manufacturers cried foul and the Commerce Department and International Trade Administration appealed the case all the way to the WTO and won. Now, those chickens have come home to roost. By filing the complaint, India has triggered a 60-day window for the U.s. to settle the dispute, after which India could ask the WTO to adjudicate.

Two-Month Trial: Metal Buying Outlook

California’s clean energy law, alone, has some of the richest solar subsidies in the world. Not only does the state offer cash back for installation of panels, it also doesn’t include rooftop generation by homeowners as mw that go toward meeting the state’s ambitious energy targets (50% of all energy from renewable sources by 2030). That means utilities creating their own solar parks get more impact toward meeting government goals, and rewards and lawmaker consideration, than homeowners and businesses do. Ratepayers essentially subsidize utility companies toward meeting the state’s renewable goals.

21 states and the District of Columbia include rooftop solar panels in their mandates for clean energy but not California.

What Does This Have to do With Renewables?

California’s subsidies for providing panels to solar projects are also quite rich. The California Solar Initiative offers rebates to buyers of the panels whether they are installed on homes, businesses or in utilities’ solar parks. The value of each rebate is defined by a complicated equation, but if India can prove those subsidies are against WTO — especially considering how much more consideration big buyers like utilities receive than homeowners and businesses — the case could be a serious slam dunk against U.S. solar subsidies.

Actual Renewables Prices

Chinese neodymium fell to $47,913.87 per metric ton this month, down from $48,920/mt in August, a drop of 2%. U.S. steel plate fell to $591/mt this month from $650/mt in August, a fall of 9%. U.S. Grain-oriented electrical steel increased to $2,600 per ton this month, up 3% from $2,530/ton in August.

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