China's solar energy advance is a wake-up call for US

As the US lumbers on in debate over renewable energy reform, the PRC is moving forward to become the world’s biggest contender in the solar energy market. Boosted by generous government subsidies, bountiful cheap labor and an ever-increasing demand for green energy, Chinese companies like Suntech are gradually overtaking their American and German competitors.

This may be good for PV consumers – as the Times noted in an article yesterday, “Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year” – but spells bad news for US solar producers. Initial investments promised by the stimulus plan are unlikely to staunch the trend:

The (US) Energy and Treasury departments announced this month that they would give $2.3 billion in tax credits to clean energy equipment manufacturers. But even in the solar industry, many worry that Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year.”

Furthermore, China’s solar companies are pushing their way into the American market “at all costs”, selling their panels and equipment below cost to expand their share of the US market.

Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation. As Japanese automakers did decades ago, Chinese solar companies are encouraging their United States executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root.”

Clearly, this would not be conducive to President Obama’s stated desire to make the US “the world’s leading exporter of renewable energy”. Allowing foreign companies to gain an edge in our domestic solar market will both hinder our ability to create ‘green collar’ jobs here at home and undermine our economic competitiveness internationally.

In Europe, the solar industry is supported by subsidies not only the manufacture of PV equipment, but also R&D and solar energy production. Furthermore, businesses and individuals with solar installations are able to sell their generated surplus electricity at guaranteed fixed prices. Germany in particular has pioneered this, bringing remarkable success for the growth of its solar industry both domestically and internationally.

The US may not be able to compete with the low labor costs and loan interest rates available to Chinese companies. European renewables legislation may not be a perfectly implementable model for our markets. But by making it easier for US companies to produce solar equipment — and thus for consumers to buy it — we have a unique opportunity to reduce our greenhouse gas emissions and dependence on foreign oil, strengthen our economic security, and boost domestic solar production and demand – meaning more American homes and businesses powered by American-made solar panels, sold by American companies.

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