Protective tariffs cloud clean energy future
At a time when unemployment is still unacceptably high, does it make sense to use protectionist tactics that might cost jobs? An Obama administration proposal made last week might do just that.
The White House ordered last Thursday that tariffs of 31 percent and higher be placed on solar panels imported from China. The order came after a coalition of U.S. solar panel manufacturers filed a complaint last October accusing Chinese solar companies of illegally flooding the U.S. market with underpriced solar panels, a practice referred to as “dumping.”
It must be said, as clean-energy subsidies and tax breaks are set to expire soon, why would the Commerce Department start a trade war that might worsen the situation for nascent renewable-energy generators?
But first, a little background.
China saw this coming. Its solar panel industry threatened in November that if heavy tariffs were placed on Chinese exports, the industry would file a trade case at the Commerce Ministry against American exports of polysilicon, the main component in photovoltaic panels.
Second, the “antidumping” tariffs would be added to existing antisubsidy tariffs of 2.9 to 4.73 percent imposed in March. The total costs most likely would cause a significant increase in the price of imported solar panels, which would discourage consumers from buying solar.
To be clear, the Obama administration has favored a more open trade policy with China.
The other facet of this disagreement has to do with Chinese state-owned banks. In keeping with China’s current Five-Year Plan, the banks invested huge amounts of capital in solar factories. In fact, we urged China to develop renewable energy to alleviate air pollution, mitigate climate change and reduce oil imports.
Now, those bankers are worried about a capacity glut in solar production and may be unwilling to invest further. This glut, some say, is responsible for Chinese manufacturers slashing prices to retain market share.
For American manufacturers to compete successfully with their Asian counterparts is an unlikely scenario, which is probably why companies like Solyndra and others folded. Now, 70 percent of our solar jobs are in installation, distribution and marketing, not manufacturing. That horse has left the barn.
The Solar Foundation reports that the industry employed 100,000 workers last year, which was about seven percent more than in 2010. We don’t want to lose these jobs, but if Chinese imports go away or become too expensive, the administration’s push toward energy independence may dwindle and unemployment figures may still climb. That would be bad news for all of us.
So while the U.S. pioneered photovoltaic solar cells decades ago, it has fallen behind in manufacturing. But what we lose in making products may be recouped in service sector jobs and in new technology.
The industry standard of flat panels attached to roofs may be morphing into upright 3-D towers that can increase power output anywhere from two to 20 times that of fixed flat panels. Researchers at MIT have completed and tested the new modules that boost power in winter months and on cloudier days because they collect much more sunlight during mornings, evenings and when the sun is closer to the horizon. The researchers say the higher cost could be offset by higher energy output for a given footprint and more uniform power output over the course of a day.
Also, a recent development from National Renewable Energy Lab is a black silicon anti-reflective layer on solar cells, which would enable solar panels to capture more sunlight, even at less than optimal angles. The emphasis is on low manufacturing costs, a key element of President Obama’s SunShot Initiative.
So are we better off supporting advances in research and technology that may pay off in the future, or closing ranks behind those who favor trade barriers against imports of existing products?
As clean-energy subsidies expire, instead of arguing over their reinstatement, we might do better to shift federal support toward technology and training workers for installation and service of newer and more efficient products. This could be a boost to our economy and our environment.