As someone who has played an active role in the development and growth of the U.S. solar industry over the last 15 years, I view the actions by German-based SolarWorld to obtain costly government-imposed tariffs on imports of solar cells and panels to be a grave threat to our industry’s growing success. Driving down the costs of solar, not raising them, should be our primary goal.
For an unprecedented the second time, German-based SolarWorld has petitioned the US Department of Commerce and the International Trade Commission to impose tariffs on solar imports from China. The first time, SolarWorld went after China alone. Now, SolarWorld has decided to go after our ally, Taiwan, as well. While clearly an effort to protect its own high-cost solar panel production from lower-cost competitors, SolarWorld’s action will significantly hurt US consumers and the US solar industry where most of the jobs are in installation, financing and servicing, not manufacturing.
The sharp decline in the price of polysilicon — the main ingredient in most solar cells — and the cost of manufacturing solar cells and panels has led to huge growth in the installation of panels on US residential and commercial rooftops. According to the latest report from the Solar Energy Industries Association (SEIA), “2013 is likely to be the first time in more than 15 years that the US installs more solar capacity than world leader Germany.” Additionally, the report found that average photovoltaic system prices fell 4.2 percent in the third quarter of 2013 compared to the previous quarter, reaching a new low of $3.00/W. SEIA is predicting that the United States will install a total of 4.3 GW of new photovoltaic systems in 2013, up 27 percent over 2012.
The growth in U.S. solar jobs tracks the growth in panel installation. Overall, the US solar industry is booming and employs 120,000 workers. SolarWorld employs less than 1 percent of them. According to the Solar Foundation’s latest Annual Solar Jobs Census, the U.S. solar industry added 23,682 jobs in 2013, increasing its employment to 142,698 people, which is a 19.9 percent year-over-year increase.
At a time when polysilicon prices near all-time lows and declining financing costs are driving record growth, SolarWorld is seeking to halt the solar industry’s progress in its tracks. In an increasing number of markets, solar electricity has become competitive with fossil fuel generated electricity, a situation known as grid parity. This demonstrates the success of solar in cutting carbon emissions — another vital goal threatened by SolarWorld’s latest petition.
The manufacturing of solar cells, modules, panels and other equipment is international. The United States, for example, is the low-cost polysilicon manufacturer while China and now Taiwan are the low-cost solar panel and cell manufacturers. For the worldwide solar industry, this is good news because driving down the cost of solar means expanding the use of clean renewable energy at the expense of dirty polluting energy. More importantly, what we learned the first time around is that it makes no sense for the U.S. government to prosecute a trade case, which is not going to solve the problem of promoting American manufacturing. Instead, it will damage the rest of the industry. It will hurt consumers and jobs, which can never be outsourced to other countries.
It should be further noted that SolarWorld has chosen to ignore the fact that its actions have allowed the Chinese government to retaliate against US manufacturers of polysilicon by placing tariffs at levels as high as 57 percent.
A destructive solar trade war is the worst thing for the U.S. solar industry. SEIA has condemned SolarWorld’s action saying, “More litigation is the wrong approach. Trade litigation is a blunt instrument and, alone, incapable of resolving the complex competitiveness issues that exist between the U.S. and Chinese solar industries. It's time to end this conflict and negotiations must play a role.” The Europeans and Chinese reached an agreement in their conflict. For the good of the U.S. solar industry, the Obama administration must take a greater interest in the 99% of the solar industry that will become collateral damage in this trade process. We need to foster an outcome that does not rely on the blunt and destructive instrument of tariffs.
Lead image: Gavel via Shutterstock