Wednesday, 7 December 2011

US to tax solar panels?

As if it was not bad enough that European states are clawing back on the solar feed-in tariff rates, the US is moving towards actually artificially increasing prices of solar panels through putting TAXES on imported solar pv panels. I will explain that even more starkly. While Europe is still subsidising solar pv panels, the US is going to tax them! The US International Trade Commission has, according to the online journal Renewable Energy World, 'unanimously determined that Chinese solar panel and cell imports are harming the American solar manufacturing industry'. This, it seems, is a precursor of  import duties being levied on solar panels imported from China. To add an ironic twist, this policy is being promoted by some US based solar companies themselves. They argue that China is 'dumping' lots of solar panels on the US market and putting them out of business.

Essentially, Chinese manufacturers are selling at cheaper prices than western ones. Partly this is a case of the Chinese having the foresight to invest in green industries, and partly this is a part of the busienss cycle that you get when periodically supply exceeds demand, as opposed to vice versa which pushes up prices.

However, for the solar industry to start arguing that, in effect, prices must be put up through protectionism is the complete opposite of what should be an ecologically driven policy to drive down global prices for renewable energy technologies. The US position is also sacrificing progress in solar technology for protectionist purposes, and this at a time when the world needs to be as internationalist as possible in its trade policies to avoid the selfish nationalism of the 1930s which brought ruin on everybody. If the allegedly idealistic renewable energy industries cannot hold the line on this, who can?

As far as I can see, the main US case seems to rest on claims that the Chinese are putting barriers in front of imports of US solar panels. It is in fact fairly debateable to argue that Chinese barriers are worse than US ones for renewable energy given, for example, the relative availability of incentives like the production tax credit for US based rather than non-US based companies. At its most charitable best the US argument is one for taking the issue to the WTO. It is certainly not an argument for taking unilateral action, such as setting import tariffs on solar panels,  which is likely to adduce retaliation of various sorts. At worst this is sheer hypocrisy as the west in general (including the US) subsidises its own industries in various implicit and often quite obvious ways (as in the case of agriculture) to allow its products to be well and truly 'dumped' on developing nations.

We often hear disparaging noises from the US (even from some solar companies) about European feed-in tariff policies. Well, parts of Europe are developing large capacities of solar pv, led by Germany, that stand in contrast to the sluggishness of progress in the USA. US policies seemed designed not only to fail to give much encouragement to expansion in solar capacity, but actually to stop it happening by increasing prices for solar power through restrictive trade tariffs and policies. What this issue does expose is the sad truth that the leadership of the renewable energy industries has increasingly little to do with the US.

See the Renewable Energy World Report on:

1 comment:

  1. Solar panels generate electricity by converting the energy radiated from the sun. The efficiency of these renewable power sources is getting better with the progress of technology and they are getting more common.

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