Trade Wars: The Reaction

Coalition forms to counter complaint

Bill Opalka | Nov 08, 2011


The other shoe has dropped in the looming trade war over alleged Chinese dumping of solar panels on the American market. A coalition of manufacturers and project developers has formed to counter the move toward tariffs that was launched three weeks ago,

The group held its coming out news conference Tuesday on the same day that hearings were held in Washington to begin the process of determining if alleged dumping of solar cells into the United States is occurring.

A petition to begin a trade case against the Chinese was filed during the recent Solar Power International conference by a coalition led by SolarWorld AG’s U.S. unit, which filed a complaint with the U.S. International Trade Commission in Washington. It has six manufacturing partners who so far have remained anonymous, fearing retribution.

So the Coalition for Affordable Solar Energy (CASE), was formed in response, initially representing 25 organizations and more than 9,200 jobs in the U.S. solar industry, it says.
CASE was formed in response to an anti-trade action filed by Germany-based SolarWorld with the U.S. government that it says threatens the entire U.S. solar industry.

“If they succeed, prices for solar will go up, demand for solar energy will go down, and the U.S. market will be significantly undermined,” said Kevin Lapidus, senior vice president of solar plant developer and operator Sun Edison.

The industry expected about 2.6 gigawatts of solar generation to be installed next year, representing an investment of $10 billion to $12 billion, which Lapidus says, the complaint puts at risk.

He also said declining government support for solar projects over time has an impact on the cost of installed solar, making developers seeks to lower costs  aggressively to remain competitive. Lapidus added that costs reductions are occurring throughout the supply chain, not just solar cells, which is the focus of the trade complaint.

According to CASE: "Global competition is making affordable solar energy a reality in America and around the world. SolarWorld's action to block or dramatically curtail solar cell imports from China places that goal at risk. Protectionism harms the future of solar energy in America and negatively impacts consumers, ratepayers, and over 100,000 American solar jobs. The coalition is committed to growing a domestic solar industry, promoting innovation, and making solar an affordable option for all Americans."

The U.S. International Trade Commission will decide soon whether there is enough evidence to launch a formal investigation. The Commerce Department would take up the case a few months after that.

In other words, this is not ending quickly or quietly.

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Cake and eat it too???

Hmmmm - we want jobs, but we also want low prices.  As an industry, we want our cake and eat it too.  Both sides of the issue have valid concerns.  Installers can install more if the price is right.  Manufacturers will only exist if they can be competitive.  Consumers want the most for the least. 

Of the three legs of that stool, manufacturers by far have the most difficult time competing.  US-based manufacturers have to contend with not only a labor force that actually expects a living wage, but they also have to contend with all the rules and regulations imposed upon them to ensure the protection and health of the environment and their workers.  Transportation and warranty response are the only areas where domestic manufacturers have a competitive advantage.

Isn't it odd that a product that is widely touted to "save the environment" and "improve the quality of life" is bridged by exporters who's manufacturing processes perhaps do neither?  We need to remember that the life-cycle of the product did not start at installation - there is an entire manufacturing / transportation cycle ahead of that which should be of concern to consumers.  Sadly, most consumers "vote" only with their pocketbooks, and their pocketbooks do not take into account the long-term impact to their own way of life (reducing tax base, offshore manufacturing, deportation of domestic manufacturing, increasing taxes, etc...) or to the short-term environmental / human rights / geo-political issues that accompany that manufacturing process.

Installers fall within the same camp as many consumers - they are only looking at the short-term personal benefit.  Wouldn't it be better to have a robust domestic "whole market" (design, manufacture, transportation, service, decomissioning / salvage) capability instead of being only a service provider to off-shore manufacturing?  Money generated within a community will "churn" up to  11 times.  Money that goes off-shore never returns.

To be sure, manufacturers need to develop scale and competitive prices.  They need to do it within the framework of the laws and regulations of this nation - laws and regulations that generally support the values of the people of this land.  But the other two legs of this triad also need to understand that their role is no less important.  Consumers need to look at warranty service, the impact to their communities and their responsibilty in a global sense.  Installers need to do similar - to be innovative in their approach so that they offer value, quality, service, and support.  It can be a win-win.