China is currently the world’s leading manufacturer of solar panels. In China there is considerable financial support to companies in renewable industries, such as those in solar. Therefore, governmental support has made it easier for Chinese companies to get a step ahead in the solar industry, at least according to some unhappy competitors.
In October, SolarWorld Industries America Inc. and six other manufacturers of solar panels officially filed a complaint to the U.S. International Trade Commission and Commerce Department. The companies believe that due to the incentives given in China to solar companies, they are gaining an edge over U.S. manufacturers. The companies would like to see import duties placed on solar panels imported from China in order to decrease the divide.
The influx of Chinese solar panels have reportedly caused some solar businesses to go bankrupt, some to lose jobs and all to lose money in the U.S.. It is estimated that the average size home would cost between $3,000 to $5,000 more to have solar installed using U.S. produced solar panels rather than Chinese produced.
It is said to be a violation of international trade rules for the solar industry in China to be subsidized so greatly by their government and not face import taxes in other countries. According to the Department of Commerce, the Chinese government subsidizes the solar industry by over $30 billion. This is compared to the approximate $1 billion in subsidies in the U.S.. Of course, it is not China’s fault that the U.S. does not support the solar industry as readily as China chooses to do in their country. However, the groups are hoping that international trade rules will assist in balancing the playing field.
Not surprisingly this has Chinese manufacturers concerned and displeased by the potential new tariffs. In 2010, the U.S. imported $2.4 billion solar panels from China which would result in considerable duties for the companies if such import numbers continue.
Chinese companies have already indicated that they will work to find ways around the tariffs. It is likely that major companies in the solar trade in China will move part of their manufacturing to other areas of the globe where the U.S. will not be imposing such tariffs, such as in Africa, Europe or even the U.S. itself. By working to avoid the tariffs Chinese companies may leave U.S. companies unhappy with the current situation in the same situation prior to tariffs being imposed.
If the tariffs pass, it is likely that prices will increase in the U.S. for solar products as much are attained from China, as mentioned above. This will likely impact homeowners, utility companies and others directly involved in the solar market. Overall, many believe imposing tariffs on Chinese solar imports will considerably impact solar across the U.S..
The decision on the tariffs for Chinese solar panels is due sometime this summer. The tariffs are expected to be approved by the Commerce Department.