Seven U.S. solar panel makers filed a broad trade case in Washington against the solar panel industry in China on Wednesday, accusing it of using billions of dollars in government subsidies to help gain sales in the U.S. market.
The companies also accused China of “dumping” solar panels in the United States for less than it costs to manufacture and ship them.
The trade case, filed at the Commerce Department, seeks tariffs of more than 100 percent of the wholesale import price of solar panels from China. Imports of Chinese solar panels to the United States totaled $1.6 billion in the first eight months of this year.
The filing, which the Commerce Department has no choice but to review, under federal rules, comes as anti-China sentiments are running high in some Washington corridors.
The Senate recently passed a bill that would require the Treasury Department to order the Commerce Department to impose tough tariffs on certain goods from China, if Treasury found that China was improperly valuing its currency to gain an economic advantage. So far, Republicans have declined to bring the House version up for a vote.
Commerce officials in China had no immediate comment about the solar panel filing, but have long vehemently opposed such trade cases. The matter will probably be controversial within the United States, too. For one thing, if successful it would drive up the cost of solar energy in the name of keeping the U.S. industry competitive.
The case also coincides with criticism by congressional Republicans of the Obama administration’s efforts to support U.S. clean energy companies. Republicans argue that federal loan guarantees of more than a half-billion dollars to the now-bankrupt solar company Solyndra show the folly of the administration’s trying to guide industrial policy in clean energy.
A solar company manager in China, speaking on condition of anonymity, said in a telephone interview that in any trade case filed by the U.S. industry, “we would be well prepared and are confident we could defend it.”
President Barack Obama recently appeared to support the domestic solar industry’s concerns, in a White House news conference Oct. 6: “Even if the technology was developed in the United States, they end up going to China because the Chinese government will say, ‘We’re going to help you get started, we’ll help you scale up, we’ll give you low-interest loans or no-interest loans, we will give siting, we will do whatever it takes for you to get started here.’”
The filing is a sweeping effort by the hard-pressed United States renewable energy industry to use trade laws to slow or reverse the rapid rise of Chinese companies in the U.S. market.
But it may yet prove too late to save the U.S. industry. China already accounts for three-fifths of the world’s solar panel production, giving it enormous economies of scale even as U.S. companies have been closing factories and laying off thousands of workers this year.
China holds a similar share of the world’s wind turbine market, and wind energy companies in China are preparing for a big push into the U.S. market as well.
In the case of solar equipment, China exports 95 percent of its production, much of it to the United States, which has helped push wholesale solar panel prices down from $3.30 a watt of capacity in 2008 to $1.80 by last January and now to $1.20. A typical solar panel might have a capacity of 230 watts.
The trade case seeks tariffs “well in excess of 100 percent” on the wholesale price of solar panels from China on arrival at U.S. docks, as punishment for “dumping” goods. The filing also requests additional tariffs to offset the benefits from subsidies, but does not propose a percentage.
Including installation, the U.S. solar power market is worth about $6 billion a year. So far, solar power generates only about one-tenth of 1 percent of the United States’ electricity because it is still more expensive than fossil fuels. Any price increase in the technology, as a result of tariffs, is not likely to improve that ratio.