Earlier this year the U.S. imposed tariffs on Chinese solar products after the U.S. Commerce Department deemed that China provided Chinese solar panel manufacturers unfair subsidies, resulting in artificially low prices. These low prices, it was argued, made it difficult for more expensive American solar products to compete in global and domestic markets. At the time, opponents of the tariffs argued that the move would increase prices, eliminate jobs and threaten the U.S. solar industry.
Recent analysis shows solar prices continue to fall even though Chinese manufacturers, eager to stay in the U.S. market, are buying more expensive components outside China to avoid the tariffs. The Coalition for American Solar Manufacturing (CASM) reports that despite a 45 percent drop in May imports from China between 2011 and 2012, “Imports from several other countries continued to rise significantly… these countries include Malaysia ($135.5 million, up 950 percent from the year-ago period), Taiwan ($47.2 million, up 615 percent) and the Philippines ($41.5 million, up 47.3 percent).”
Reuters reports that some analysts believe that within two years, Chinese module makers will have entirely circumvented the import duties by shifting work to other countries. “The tariffs are too little, too late in terms of their intended effect,” says renewable energy analyst David Kurzman of Leuthold Weeden Capital Management.
What does this mean for U.S. renewable energy manufacturing? What reasons exist for the U.S. to protect domestic manufacturing in the shifting, growing global energy technology markets? Is U.S. technological leadership worth the cost of higher energy prices?