March 21, 2012

Last week the United States Department of Commerce (DOC) determined that Chinese manufacturers were unfairly selling solar panels below market value in the US.  This practice, known as “dumping,” violates the World Trade Organization’s rules governing international trade.

As a result, the US will now impose a 31% tariff (higher in some cases) on solar cells manufactured in China and exported to the US.  The duty does not apply to panels assembled in China--just the cells, which are the basic “building blocks” of panels.  As the Los Angeles Times points out, Chinese firms can simply manufacture the cells in surrounding countries and assemble them in China to avoid the tariff.

The DOC’s action against China is controversial, since it will have a mixed impact on the US solar market.  On one hand, the DOC wants to curb the closure of US manufacturing plants, which has been happening at an alarming rate in recent years.

* Courtesy of Congressional Research Service

On the other hand, solar installers argue that the tariff will hurt the solar market, as it will make panels more expensive for homeowners and business.  The solar industry has experienced tremendous growth in recent years due, in part, to a 30% federal tax credit and dwindling panel prices.  As the price of installing solar becomes more affordable, the more sales and installation jobs we stand to gain.

*Courtesy of Congressional Research Service

Is there reason to prefer solar manufacturing jobs to solar installation and sales jobs?  Should we be concerned if the tariff reduces the overall number of panels installed in the US?  How do we balance the environmental consequences of fewer solar installations? Energy security?  Share your thoughts in the comments below.

Interesting sources for further reading: (in-depth report covering industry trends written by the Congressional Research Service) (LA Times article providing solid overview of the recent DOC decision) (Industry analysis of what DOC decision means for solar installers)