China's Alleged Solar Crimes May Be Boon For U.S.

06/11/2011 12:00 - 379 Views

Solar panels in Oxnard, Calif., shift with the sun as they are shrouded in fog. Last month, the Coalition for American Solar Manufacturing filed... View Enlarged Image

President Obama has thrown his weight behind the trade complaint made by a coalition of solar panel makers against China, vowing to aggressively probe the case.

"We're going to look very carefully at this stuff and potentially bring actions if we find that the basic rules of the road have been violated," he told a Portland, Ore., TV station on Tuesday.

Those comments "heartened" Gordon Brinser, president of Oregon-based SolarWorld Industries America, which leads the coalition.

They may not sit well with the rest of the domestic solar industry, though. For many in the industry — perhaps a majority — China's alleged trade crimes are actually a boon for them and green energy.

Last month, the Coalition for American Solar Manufacturing filed anti-dumping and related charges vs. China with the Commerce Department and the U.S. International Trade Commission.

The coalition of seven manufacturers alleges that China was selling solar panels at below cost, undermining U.S. makers. Sales of Chinese panels to the U.S. rose 350% between 2008 and 2010 and are still rising, according to CASM. China reportedly has 55% of the world market.

But the main industry trade group, the Solar Energy Industries Association, did not endorse the action. That's because manufacturing is only about 25% of the domestic industry. Installation and sales of components and raw materials account for nearly all the rest.

"The overwhelming majority of our members are small- and medium-sized U.S. businesses, primarily installers," said John Smirnow, SEIA's vice president for trade and competitiveness.

And for those people, China's cheap solar panels are a blessing. Meanwhile, China's need for raw materials to build the panels boosts domestic suppliers.

The U.S. is a net exporter to China on solar energy products, according to SEIA, with a trade balance of $247 million to $540 million last year. Worldwide, U.S. exports of solar energy products were $1.9 billion in 2010.

Cheaper Green Power Isn't Bad

Even if China has undersold U.S. manufacturers, that is helping others turn solar from a fringe energy source to a mainstream product.

"The big dynamic in the solar industry has been the tremendous cost reduction that has happened," said Arno Harris, chief executive officer of Recurrent Energy. "Solar panels have gone down 70% or more since 2008."

Solar is now a very attractive option to utilities that need to meet government mandates to generate energy from renewables. Utilities that used to turn to wind are now buying as much solar as they can get their hands on.

11/02/2011 06:51 PM ET

By Sean Higgins

Source: investors.com