Policy and Trade Issues with China Cause Solar Panel Market Shifts in US

Rows of PV panels on rooftops in Tieshen, China (Wikimedia)

Recent changes in policies and trade across China and the U.S. have resulted in major shifts in the way these regions are taking advantage of solar power. Policy and trade have a huge impact on whether or not private sector firms will invest in new technologies they believe they can bring to market profitably.

While declines in the manufacturing of PV have occurred in the U.S., China is forging ahead with subsidies from their government and private investments. The next few years promises to see continued positive movement in the field and hopefully will result in delivering new, innovative, affordable products to consumers.

The Good: China Significantly Increases Production

China is the biggest manufacturer of solar power panels today. In recent statements made by the Chinese Government, they plan on quadrupling their domestic installation goal for solar renewable energy projects to 21 gigawatts by 2015. As renewable energy technology continues to become more affordable, photovoltaic prices have dropped as well. Energy prices have decreased by about 42% to $0.87 a watt since just last year . “With a significant tumble in photovoltaic prices, the timetable for mass use is ahead of time,” said Lian Rui, a senior analyst for the research company Solarbuzz reports renewableenergyworld.com.

China has continually supported financial assistance programs designed to stimulate business within their renewable energy industry. In 2009, the Golden Sun Program was given financial assistance to further these ends. In 2012, China gave GCL-Poly Energy Holdings Ltd., Yingli Green Energy Holding Co., and approximately 100 other developers, 5.5 yuan per watt (renewableenergyworld.com). These companies were qualified to benefit from the program as long as they were currently producing 1.7 gigawatts of renewable energy.

The Bad: Possible Tariff on Chinese Solar Panel Imports May Create Trade War

Recent reports have shown that Chinese companies in the solar power industry have been able to sell their products consistently at below market prices here in the U.S., vicariously snatching up over 59% of the market (foxnews.com). In response to these occurrences, the Commerce Department claims they may add a 31% tariff on any solar power imports coming out of China (foxnews.com). This figure is the exact percentages Chinese Imports have been able to underbid U.S. competitors.

Private companies in the U.S. generally aren’t manufacturing these products (foxnews.com). Instead they focus primarily on engineering and installation. Inadvertently they rely on low solar panel costs and believe this move could hurt their ability to maintain customer bases and high profit margins due to the increase in solar power prices.

The Ugly: A Leading Innovator in Photovoltaics Bows Out in Germany

Schott Solar is one of the oldest solar power companies in the world. Their involvement in the industry can be traced back to 1958. Recently they stated their intent to stop producing crystalline silicon solar panels in Germany by October. The German newspaper Wormser Zeitung stated that 879 out of Schott Solar’s 1,100 will be affected by the decision as reported by renewableenergyworld.com. Schott Solar will also be closing their manufacturing location in Albuquerque, New Mexico, where 250 employees will find themselves out of work. Schott will not stop doing business in the U.S. but the company will cease their manufacturing practices at this point.

About 600 employees have lost their job already at Schott Solar in the last year when the company shut down its multicrystalline wafer production in Jena, Germany and its cell manufacturing facility in Alzenau, Germany. At this point, over 18 manufacturers of solar products have claimed bankruptcy or wound up restructuring in the last year.