U.S. Imposes Steep Tariffs on Chinese Solar Panels

http://www.nytimes.com/2014/12/17/business/energy-environment/-us-imposes-steep-tariffs-on-chinese-solar-panels.html

by ytNumbers • 12 years ago

56 40 12 years ago

justinsb• 12 years ago

Seems like a biased source (author is "talking his book"). Better sources:

http://blogs.barrons.com/asiastocks/2014/12/18/china-solar-l... "...the new ruling will have limited impact as Chinese solar companies have adjusted strategy since the preliminary decision."

http://www.nytimes.com/2014/12/17/business/energy-environmen...

dang• 12 years ago

Thanks. We changed to the NYT article from http://www.fool.com/investing/general/2014/12/20/us-deals-ma... because, of the two you mention, it's a bit more substantive.

revelation• 12 years ago

The cynic in me would probably ascribe actions to tax Chinese solar panels as small steps towards banning and slowing the adaption of clean energy generation.

Because the alternative is just too stupid to consider. Making solar panels as they exist today is 1) a commodity business and 2) very, very, very simple. Surely no one would be stupid enough to believe that US manufacturing could be cost-competitive with China in manufacturing a product where the sole complexity lies in sourcing high purity silicon? There aren't even any manufacturing jobs involved here, it's probably 100% automated.

Some argue that China is subsidizing chinese solar panel manufacturers and thereby distorting the market. But then that's not even necessary, as explained nobody would be insanse enough to try and rival them by manufacturing a commodity in the US when you would have to ship the silicon over from China first.

So the effect chinese solar subsidies are having is making solar panels extremely cheap for Americans, transforming the way the US generates energy. They're financing our switch to clean energy.

zo12• 12 years ago

"So the effect chinese solar subsidies are having is making solar panels extremely cheap for Americans, transforming the way the US generates energy. They're financing our switch to clean energy."

And then the US government goes ahead and forces everyone in the country to pay more for something they could have gotten cheaper for whatever reason. Is no one disturbed by this?

icegreentea• 12 years ago

Your statement is pretty much a summary of taxation in general... so no, I don't think many people are really disturbed about that.

Symmetry• 12 years ago

No need to invoke hidden conspiracies trying to fight clean energy when the public conspiracies are sufficient explanation. Public Choice Thoery[1] says that when a potential regulation provides great benefit to a small group of people and a small detriment to everyone else it will tend to be adopted. The Solar Energy Industries Association's members and employees will vote against the reelection of politicians who allow their livelihood to be destroyed but the vast majority of the millions of people who see their electric bills go up won't even know why and those who do probably have issues they consider more important to base their votes on. Of course maybe the Coalition for Affordable Solar Energy will be able to convince enough people that they should care to influence policy but the odds are stacked against them. Especially since the default is that we protect every industry against "unfair competition" unless a special exception is made.

Maybe things will change under the next administration? You might remember Obama making a lot of noise about "green jobs" for Americans so a future Republican president might feel that American solar manufacturers are going to be against him no matter what and so remove the import barriers. But then again the people who care about lowering the barriers are also traditionally aligned against the Republicans so I'm not sure the politics works out.

[1]http://en.wikipedia.org/wiki/Public_choice

AnthonyMouse3• 12 years ago

The Solar Energy Industries Association

The people who make solar panels in the US are a preposterously small constituency.

The thing to remember is that cheap Chinese solar panels don't just compete with less-cheap American solar panels, they also compete with oil, coal and every other source of generating electricity.

Fossil fuel companies fight the construction of nuclear plants by claiming we should be building solar instead, because they know if they prevent nuclear then solar isn't cost competitive with fossil fuels. Then they make sure solar isn't cost competitive by doing things like this. And if that doesn't work they do what OPEC has been doing recently and increase production so that fossil fuel prices fall.

It's not a "conspiracy" -- it's companies and OPEC-member governments acting in their own rational self-interest. (If you can call ignoring climate change rational.)

Aloisius• 12 years ago

Some argue that China is subsidizing chinese solar panel manufacturers and thereby distorting the market. But then that's not even necessary, as explained nobody would be insanse enough to try and rival them by manufacturing a commodity in the US when you would have to ship the silicon over from China first.

Well considering the vast majority of polysilicon is made outside of China and the US itself is actually one of the major producers of it, I don't see why you'd have to ship it out of China first.

Also exactly why would US automated commodity manufacturing not be cost-competitive with China? We produce a huge amount of commodities. They compete just fine with the Chinese.

And more importantly, are you trying to imply that the commodities businesses are somehow not valuable and we should just not have dumping laws?

hindsightbias• 12 years ago

This plus falling oil prices is going to set back PV for a long time.

_broody• 12 years ago

Oil is only going to fall long enough for Saudi Arabia and the US to bankrupt Russia, though (and they're pretty far along into it already).

rjsw• 12 years ago

Or for Saudi Arabia to bankrupt US fracking companies.

saryant3• 12 years ago

Except that oil accounts for all of 1% of US electricity generation.

http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3

bdcs• 12 years ago

Yes but PV is one quarter the electricity production of even petroleum.

AnthonyMouse3• 12 years ago

Natural gas is a petroleum product.

FrankenPC2• 12 years ago

None of this would matter if the US Solar installers would stop price gouging the customer. I just got 4KW installed of Canadian Solar panels. They come with an actual 25 year insurance bond to cover the warranty. I'd like to see China try that. The installation was literally half what SolarCity quoted me. The little guys make a nice profit but don't gouge and you get superb quality panels.

Capitalism. it's really hard to tell what's really an issue and what's abject greed.

diafygi• 12 years ago

Soft costs are a huge problem right now in solar. They accounts for 64% of installed cost[1], which is crazy. Luckily, there is a big effort to reduce these costs[2].

[1] http://www.nrel.gov/news/press/2013/5306.html

[2] http://energy.gov/eere/sunshot/soft-costs

ghshephard2• 12 years ago

What did a 4KW Canadian Solar panel system cost you, inclusive of warranty? How large a battery system? Also, did it have a cutoff that disables the solar panel system if you lose utility power?

FrankenPC2• 12 years ago

16 panels installed, Permitted, micro-inverter tech, with hard mounting rails (through tile), not the easy hangars most people install with cost me out the door 16K$. Then I got a 30% tax rebate from the feds. Everything has 25 year warranty on it from manufacturers.

This is a grid tie system. No batteries. In the city we're not concerned with 100% off grid solutions. PG&E our provider has contracted with me as a power provider. So excess power is banked and credited over a period of 12 months.

Also, the system is easily extensible. I'll be adding another 3KW for another tax write off this year. No additional inspections required as the micro-inverters don't need a central monolithic inverter which need to be increased as the number of panels increases.

adventured3• 12 years ago

Most of Canadian Solar's panels are made in China, and Canadian Solar isn't one of the little guys - they're one of the world's largest solar companies. They do 10 times the sales of SolarCity.

Animats• 12 years ago

This tariff would have been more useful to US manufacturers if it had been in place before Applied Materials exited the solar cell business and Solyndra went broke.

cjensen• 12 years ago

Solyndra was destined to go broke. Consider that they built a factory in the Silicon Valley (super expensive for power and labor) right next to a freeway with a giant copy of their name facing the freeway. They weren't trying to make solar panels: they were trying to advertise themselves to rich commuters to get more dupes to invest in them.

Even looking at them through friendly eyes, you would have to conclude they were idiots for building a factory there.

adventured3• 12 years ago

Given FirstSolar and SunPower are two of the world's largest solar manufacturers, and compete directly with China, I'm sure they're both hoping to benefit from the tariffs. They both outsell nearly every Chinese solar player.

aikah• 12 years ago

Interesting case where U.S. protectionism promotes manufacturing over developers and installers.

A political choice has been made.

Let's see how it goes in the long run.

crazy1van• 12 years ago

I can't help but think this is a classic bootleggers and baptists situation [0]. Traditional energy producers (gas, coal, etc) want to keep the price of solar energy high. Domestic and other nation's solar energy manufacturers want their competition's price to be high as well. Both groups win with high tariffs on Chinese solar panels. However, the average citizen loses.

[0] http://en.wikipedia.org/wiki/Bootleggers_and_Baptists

joshhart• 12 years ago

What?? Aren't we supposed to be committed to reducing carbon emissions? Why is the government forcing me to pay more to do the right thing for the environment? If someone is willing to give us solar panels for super cheap why are we upset?

Many of the Chinese solar manufacturers are again making a profit. I find evidence that people are intentionally making panels below cost to be dubious. There was a war for market share and a lot of companies like Suntech Power went bankrupt. Seems like the market is working.

adventured3• 12 years ago

Many of the Chinese manufacturers have been losing tons of money.

SunTech of course famously imploded. So did LDK Solar.

Trina Solar has been losing money for years: $376m in losses over fiscal 2011/12/13.

ReneSola lost $501m over 2011/12/13

JS Solar lost $433m over 2011/12/13.

Yingli Green Energy lost $1.32 billion over 2011/12/13.

And in almost all of these instances, these companies lost money every single year referenced.

Some of these companies have started to produce some profits again, with formerly very high oil. That of course is likely to reverse as fast as it surfaced. Politics move slower than quarterly results however, and the tariffs have likely been planned or lobbied for, for years.

TheOtherHobbes• 12 years ago

Aren't we supposed to be committed to reducing carbon emissions?

No. We should be committed to reducing carbon emissions.

But so far, because we're not very good at thinking as a species and not just as individuals motivated solely by short-term competitive self-interest, we're very much not.

transfire• 12 years ago

Meanwhile everything else at the Great Walmart is tariff free from China.

noobermin• 12 years ago

I'd think that solar manufacturing is something that is politically desirable in the eyes of the powers that be as opposed to manufacturing other goods. Tariffing solar panels as opposed to these other goods is consistent with that.

AnthonyMouse3• 12 years ago

As much as this sounds like protectionism, it's potentially legitimate.

Doing something that covertly benefits oil and coal companies is an easy political maneuver, but that doesn't mean it isn't right.

China has had the same modus operandi for decades. Make sure manufacturing in China is cheaper than manufacturing anywhere else so that everything is manufactured in China. China likes this because it provides jobs for their people and gives them economic strength, everyone else likes it because they get cheap stuff.

But automation is changing the math. Having cheap labor doesn't matter as much when you only need 5% as many workers as you once did. So for China to keep its advantage it has to subsidize. They've always done that indirectly (e.g. devaluing their currency), and US manufacturers have complained about it, but not enough to overcome our desire for cheap stuff. Now they're having to subsidize more directly, and even then the cost difference between the Chinese stuff and the American stuff isn't that large -- imposing tariffs on China wont make the panels that much more expensive, they'll only cause them to be made in the US.

ferongr• 12 years ago

For some reason this story dropped way too fast off the front page.

droope• 12 years ago

Woah, what happened to the free market? :S

U.S. Imposes Steep Tariffs on Chinese Solar Panels

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