The U.S. Should Surrender in the Solar Trade War with China

by William Yeatman on November 11, 2011

in Blog, Features

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On October 19th, a handful of American solar panel manufacturers petitioned the Commerce Department asking for the imposition of trade tariffs on their competitors in China. In response to this petition, the Commerce Department on Wednesday agreed to investigate whether China’s trade practices in the solar sector violate international law.

There are many stupid environmentalist talking points, but the stupidest is that the Chinese government is undercutting the growth of America’s solar power manufacturing industry. According to this line of reasoning, generous state subsidies allow Chinese solar panel manufacturers to dump their products onto the American market at artificially low prices.

The American solar lobby claims that China’s state owned banks are authorized to give almost $30 billion in low-cost loans to Chinese solar panel manufacturers. That figure was clarified by a top Chinese solar executive in an interview with Bloomberg. According to Jifan Gao, chief executive officer of Changzhou-based Trina, only 10% – 20% of the $30 billion has been disbursed. That’s $3 to $6 billion. Since the 2009 stimulus, the Department of Energy’s Loan Programs Office has brokered almost $1.2 billion in low-cost loans for solar power manufacturing, almost half of which to companies that have since gone bankrupt. (See: Solyndra and Beacon). More importantly, more than 30 states have imposed a green energy production quota that forces consumers to use solar panels, so there is a guaranteed source of demand for American solar panel manufacturers. This imposed demand is further boosted by regressive state and federal subsidies to upper-middle class environmentalists who install solar panels. When it comes to solar subsidies, the Chinese and the U.S. governments are both foolish to similar degrees.

Instead of an alleged disparity in the generosity of taxpayer-giveaways, the likely reason that China can sell solar panels cheaper than American manufacturers is the same reason why Chinese products fill WallMart: Labor and energy are far cheaper in the Far East.

From a birds eye view, the whole imbroglio is comical, albeit in a tragic sense. The Chinese busily build coal fired power plants to electrify solar panel manufacturing plants. Yet there is no market for solar panels in China. Rather, it exports 95% of its output to countries like America, which are dumb enough to impose Soviet-style production mandates for solar electricity. At the same time that American state governments are forcing consumers to use more expensive, intermittent solar power, the Obama administration is waging a war on coal, an inexpensive, reliable source of power. As a result of the EPA’s regulatory assault, coal companies in the U.S. (the “Saudi Arabia of coal”) are scrambling to build freight infrastructure to the coasts, so they can export their product to….China.

Environmentalists, renewable energy lobbyists, and their political benefactors would have Americans believe that the U.S. is in danger of losing a Great Green Game to China. Unless we pass this subsidy or that mandate, these solar enthusiasts argue, we will fail to keep up with the Middle Kingdom. In fact, this is a race we would be lucky to lose. Renewable energy exists only by the grace of political favoritism. When the political winds shift, the bottom will drop out of the industry. The more that solar panel manufacturing is concentrated in the U.S., the greater the job losses will be.

This point was recently made in an elegant fashion by the editors of the Toronto Sun, in the course of bemoaning Ontario’s unsustainable taxpayer handouts to solar power producers: “…since renewable energy can’t survive without massive government subsidy, when you cut the subsidy, you cut the jobs that subsidy creates.”

Marlo Lewis November 11, 2011 at 2:54 pm


Really? November 11, 2011 at 4:27 pm

I think you miss the point. The Chinese are welcome to own the solar industry lock stock and barrel. Please — take it.

What is not being discussed is the Chinese want US rate and taxpayers to PAY them to dominate our market. You notice this entire fight is over subsidy at the end of the day.

If the Chinese, Germans, Americans or Martians want to “own” the industry/market, then please come and do it as fast as possible and spread solar to every roof top ASAP. Just don’t ask us to pay for it anymore. Especially as American and German companies are going bankrupt due to illegal (don’t even argue that point. It’s a fact) WHILST they want us to fund the process. No sorry. Game over.

BobRGeologist November 12, 2011 at 2:54 am

Much ado about nothing. CO2 from burning coal is no problem. It has been shown that doubling CO2 in our atmosphere produces an insignificant warming and is highly beneficial to farmers crops. EPA regulation is pointless and a huge drag on the economy.

JD November 15, 2011 at 8:15 pm

I hope people enjoy unemployment, high fuel cost, scarcity of everyday items and black outs from the grid going down.

Welcome to the ‘Change’ people wanted, everyone living in misery while the wonderful speaker of lies rides in his armored bus that gets 2 mpg and flies in his behemoth air force one on his weekly vacations.

Al Gore and his agenda making MILLIONS of dollars while his electric bill is $25,000 a year.

I forgot that the ‘elite’ are exempt from their view of perfect socialist society of the failed USSR where people were exterminated like roaches. However the Communist leaders ate caviar, drank expensive wine, enjoy mansions and lived like gods.

I guess Americans need to give away everything to other countries since we are so undeserving according to Oboma talking about using A/C and the rest of the world cannot.

We cannot use coal, oil has become the anti-christ of all evil and now using A/C is a cardinal sin.

lies, lies and more lies

The idiots protesting in the cities is his creme of the crop losers who have never worked and are ALL on welfare/food_stamps/hud and some sort of ‘mental illness’ get paid thousands of dollars a month.

Get rid of welfare/hud/food_stamps/disability for people who are 20 years old and have sex to have 10 kids.

The country is going down the slippery slope and it may never come back if people do not vote this numbnut out.

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