The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

A "Third Way" Approach for U.S.-China Solar Trade

Last October, SolarWorld led a U.S. manufacturer coalition that asserted trade law violations by Chinese makers of solar cells. The coalition's filing with the Department of Commerce led to significant tariffs being levied on solar products originating in China entering the U.S.

According to filing by the U.S. manufacturers, Chinese manufacturers received lavish incentives from China’s government that gave them an unfair cost/price advantage over U.S. manufacturers. In addition to this advantage, it is asserted that the Chinese makers sold product to U.S. customers at below manufacturing costs, a practice often referred to as dumping.

Chinese manufacturers and the Chinese government argue that they did not receive unlawful or excessive incentives and did not sell solar cells and modules at below cost. Also, they allege that not enough attention is given the other factors that allow a cost advantage over U.S. makers, namely “know how” and scale. They claim the solar manufacturers coalition’s trade case was brought forward because SolarWorld had lost its competitive edge and couldn’t compete successfully in a highly competitive marketplace.

Now, because of a loophole in the tariff judgment, only the solar cell, not the entire module, has to be manufactured outside of China to avoid all tariffs.

The case has been presented that SolarWorld itself was the recipient of large amounts of incentives from the German, U.S., and Oregon governments and has no right to complain about the special treatment received by Chinese makers from their government. There are also rumors of SolarWorld modules occasionally being sold in the U.S. for extremely low, below market prices.

The result of all this chest pounding and legal maneuverings (the extent of which might not be resolved for years) is that the U.S. solar industry and all its participants—from manufacturer to end-user — has suffered. The only winners are Taiwanese cell makers. Solar modules from China that are being sold in the U.S. are now more expensive because of retroactive tariff penalties that must be paid and the additional cost of securing “out of country” cells. That price increase is magnified as the product moves from maker to EPC to end-use customers in the case of project business, and from maker to distributors and dealers to end-use customers in the case of sales through channels. Each organization marks up the increase as the modules moves from manufacturing to installation. This higher price is even more striking today as euro weakness has caused a lowering of the module price in Europe creating a 20 percent or more difference between U.S. and European pricing.

Threat of unresolved tariff amounts (that might change in the future) also has caused uncertainty among buyers which creates insecurity in the market and damages the efforts of U.S. sellers.

The reputations of both SolarWorld and the Chinese manufacturers have been tarnished, and profits, which are in short supply throughout the global solar industry, have been further squeezed by this action.

But let’s be realistic. Yes, the U.S. manufacturers have a difficult time competing pricewise with Chinese makers because the cost of doing business in China is less than in the U.S. for many reasons — including cost of labor, taxes, insurance, property, and the steadfast support of an exceedingly generous government. But also, the Chinese solar industry has been willing to take risks to establish scale which lowers solar’s total cost, and the Chinese makers have learned to refine silicon, make wafers and cells and build modules as well as or better than any other group of manufacturers.

I believe there is a “third way” of moving forward for the benefit of the solar power customer and industry participant:  Foster collaboration between U.S. and Chinese entities that lead to jointly owned factories in the U.S. that service the domestic market. The Chinese makers want access to the U.S. market and the U.S. market needs investment and the ability to create more jobs. Let the Chinese use Chinese-made cells — without penalty tariffs — if deployed in U.S.-assembled modules. Encourage the Chinese solar industry to invest in U.S. factories that produce solar products “made in the USA.”

Of course this simple suggestion is not so simple.  The complication lies in keeping the cost low for normally more expensive U.S. labor and non-silicon expenses. However, I believe U.S. manufacturing could benefit from the challenge. The same ingenuity that created commercially produced photovoltaics in the first place can be used to develop new, low cost manufacturing procedures and practices. 

Also, for this idea to become a reality a “Buy American” provision needs to be put in place where taxpayer-funded incentives (including tax incentives would be tied to mandatory American content. This idea is not loved by all, but my view is that if the taxpayers are funding the programs then taxpayers should be given some of the jobs thus making incentivizing solar power twice as valuable.

This artcle was originally published on Clean Edge and was republished with permission.

Lead image: Counting hand via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Electricity Deregulation

Japan Electricity Deregulation: Birth of Municipally Owned Electric Utilities

Junko Movellan, Correspondent The upcoming retail electricity deregulation in Japan will create a way for Japanese municipal governments to produce...
Solar panel

REC Joins O Capital in Egypt to Tap Solar Panel Market in Middle East, Africa

Anna Hirtenstein, Bloomberg REC Solar ASA has signed a deal with O Capital, the renewable energy arm of Orascom Telecom Media and Technology Hold...
Solar PV

OneEnergy Seeks Authority to Build 6 MW Solar PV Facility in Southern Maryland

Jennifer Delony OneEnergy Renewables is seeking regulatory approval in Maryland to build a 6 MW solar PV facility in Somerset County,...
Solar water heating

California Regulators Propose Expansion of Eligibility Requirements for Solar Water Heating Program

Jennifer Delony The California Public Utilities Commission has proposed expanding the eligibility requirements for customers seeking ...


Fronius Shifting the Limits in Solar-Plus: It’s not just about products, it’s about solutions.

Fronius USA, who just recently launched the all-new Fronius SnapINverter line this past...

IREC Announces Changes in Regulatory Team

The Interstate Renewable Energy Council (IREC), a not-for-profit organization which for...

IREC Awarded New Funding to Advance Digital Credentials

The Interstate Renewable Energy Council (IREC) proudly announces funding for an innovat...

$100 Discount on 5-day Advanced PV Project Experience Workhop

Upcoming 5-day Workshops: Nov. 7 - 11 Feb. 6 - 10


NY Gov. Cuomo Pledges to Create Carbon Market use Solar, Wind to reduce Climate Change

This week former Vice President Al Gore joined with New York Gov. Andrew Cuomo (D) to sign the Under 2 MOU, a directi...
clean energy

In Clean Energy, The Truth Matters

A group of about 20 protesters gathered outside the Sheraton in Burlington, Vt., early on Oct. 8 as attendees arrived...

Industry Focus: Cleantech: 1366 Technologies joins Solarcity in New York

1366 is set to build a factory just up the road (OK, it is a long road – NYS Thruway) from Solarcity.  The...


Ron Kenedi is a solar industry veteran with more than 30 years of experience, including senior management roles at LDK Solar, Sharp Electronics Solar Division, Kyocera Solar Inc., and Photocomm, Inc. He currently heads up his own advisory practice...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

PV-Diesel Hybrid Systems to Reduce Diesel Demand

Substantial fuel cost saving potential has made PV technology the centre...

Presenting at PV Insider O&M Conference

Charles Pimentel, COO of Solar Frontier Americas will be presenting on t...


Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade sch...

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospe...

Going The Extra Mile

Selling efficiency takes perseverance, creativity, and a willingness to ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now