
U.S. Imposes Steep Tariffs on Chinese Solar Panels - ytNumbers
http://www.nytimes.com/2014/12/17/business/energy-environment/-us-imposes-steep-tariffs-on-chinese-solar-panels.html
======
revelation
The cynic in me would probably ascribe actions to tax Chinese solar panels as
small steps towards banning and slowing the adaption of clean energy
generation.

Because the alternative is just too stupid to consider. Making solar panels as
they exist today is 1) a commodity business and 2) very, very, very simple.
Surely no one would be stupid enough to believe that US manufacturing could be
cost-competitive with China in manufacturing a product where the sole
complexity lies in sourcing high purity silicon? There aren't even any
manufacturing jobs involved here, it's probably 100% automated.

Some argue that China is subsidizing chinese solar panel manufacturers and
thereby distorting the market. But then that's not even necessary, as
explained nobody would be insanse enough to try and rival them by
manufacturing a commodity in the US when you would have to ship the silicon
over from China first.

So the effect chinese solar subsidies are having is making solar panels
extremely cheap for Americans, transforming the way the US generates energy.
They're financing our switch to clean energy.

~~~
Symmetry
No need to invoke hidden conspiracies trying to fight clean energy when the
public conspiracies are sufficient explanation. Public Choice Thoery[1] says
that when a potential regulation provides great benefit to a small group of
people and a small detriment to everyone else it will tend to be adopted. The
Solar Energy Industries Association's members and employees will vote against
the reelection of politicians who allow their livelihood to be destroyed but
the vast majority of the millions of people who see their electric bills go up
won't even know why and those who do probably have issues they consider more
important to base their votes on. Of course maybe the Coalition for Affordable
Solar Energy will be able to convince enough people that they should care to
influence policy but the odds are stacked against them. Especially since the
default is that we protect every industry against "unfair competition" unless
a special exception is made.

Maybe things will change under the next administration? You might remember
Obama making a lot of noise about "green jobs" for Americans so a future
Republican president might feel that American solar manufacturers are going to
be against him no matter what and so remove the import barriers. But then
again the people who care about lowering the barriers are also traditionally
aligned against the Republicans so I'm not sure the politics works out.

[1][http://en.wikipedia.org/wiki/Public_choice](http://en.wikipedia.org/wiki/Public_choice)

~~~
AnthonyMouse
> The Solar Energy Industries Association

The people who make solar panels in the US are a preposterously small
constituency.

The thing to remember is that cheap Chinese solar panels don't just compete
with less-cheap American solar panels, they also compete with oil, coal and
every other source of generating electricity.

Fossil fuel companies fight the construction of nuclear plants by claiming we
should be building solar instead, because they know if they prevent nuclear
then solar isn't cost competitive with fossil fuels. Then they make sure solar
_isn 't_ cost competitive by doing things like this. And if that doesn't work
they do what OPEC has been doing recently and increase production so that
fossil fuel prices fall.

It's not a "conspiracy" \-- it's companies and OPEC-member governments acting
in their own rational self-interest. (If you can call ignoring climate change
rational.)

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justinsb
Seems like a biased source (author is "talking his book"). Better sources:

[http://blogs.barrons.com/asiastocks/2014/12/18/china-
solar-l...](http://blogs.barrons.com/asiastocks/2014/12/18/china-solar-
limited-impact-from-us-ruling-analysts-say/) "...the new ruling will have
limited impact as Chinese solar companies have adjusted strategy since the
preliminary decision."

[http://www.nytimes.com/2014/12/17/business/energy-
environmen...](http://www.nytimes.com/2014/12/17/business/energy-
environment/-us-imposes-steep-tariffs-on-chinese-solar-panels.html)

~~~
dang
Thanks. We changed to the NYT article from
[http://www.fool.com/investing/general/2014/12/20/us-deals-
ma...](http://www.fool.com/investing/general/2014/12/20/us-deals-major-blow-
to-chinese-solar-manufacturers.aspx) because, of the two you mention, it's a
bit more substantive.

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joshhart
What?? Aren't we supposed to be committed to reducing carbon emissions? Why is
the government forcing me to pay more to do the right thing for the
environment? If someone is willing to give us solar panels for super cheap why
are we upset?

Many of the Chinese solar manufacturers are again making a profit. I find
evidence that people are intentionally making panels below cost to be dubious.
There was a war for market share and a lot of companies like Suntech Power
went bankrupt. Seems like the market is working.

~~~
adventured
Many of the Chinese manufacturers have been losing tons of money.

SunTech of course famously imploded. So did LDK Solar.

Trina Solar has been losing money for years: $376m in losses over fiscal
2011/12/13.

ReneSola lost $501m over 2011/12/13

JS Solar lost $433m over 2011/12/13.

Yingli Green Energy lost $1.32 billion over 2011/12/13.

And in almost all of these instances, these companies lost money every single
year referenced.

Some of these companies have started to produce some profits again, with
formerly very high oil. That of course is likely to reverse as fast as it
surfaced. Politics move slower than quarterly results however, and the tariffs
have likely been planned or lobbied for, for years.

------
AnthonyMouse
As much as this sounds like protectionism, it's potentially legitimate.

Doing something that covertly benefits oil and coal companies is an easy
political maneuver, but that doesn't mean it isn't right.

China has had the same modus operandi for decades. Make sure manufacturing in
China is cheaper than manufacturing anywhere else so that everything is
manufactured in China. China likes this because it provides jobs for their
people and gives them economic strength, everyone else likes it because they
get cheap stuff.

But automation is changing the math. Having cheap labor doesn't matter as much
when you only need 5% as many workers as you once did. So for China to keep
its advantage it has to subsidize. They've always done that indirectly (e.g.
devaluing their currency), and US manufacturers have complained about it, but
not enough to overcome our desire for cheap stuff. Now they're having to
subsidize more directly, and even then the cost difference between the Chinese
stuff and the American stuff isn't that large -- imposing tariffs on China
wont make the panels that much more expensive, they'll only cause them to be
made in the US.

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crazy1van
I can't help but think this is a classic bootleggers and baptists situation
[0]. Traditional energy producers (gas, coal, etc) want to keep the price of
solar energy high. Domestic and other nation's solar energy manufacturers want
their competition's price to be high as well. Both groups win with high
tariffs on Chinese solar panels. However, the average citizen loses.

[0]:
[http://en.wikipedia.org/wiki/Bootleggers_and_Baptists](http://en.wikipedia.org/wiki/Bootleggers_and_Baptists)

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FrankenPC
None of this would matter if the US Solar installers would stop price gouging
the customer. I just got 4KW installed of Canadian Solar panels. They come
with an actual 25 year insurance bond to cover the warranty. I'd like to see
China try that. The installation was literally half what SolarCity quoted me.
The little guys make a nice profit but don't gouge and you get superb quality
panels.

Capitalism. it's really hard to tell what's really an issue and what's abject
greed.

~~~
ghshephard
What did a 4KW Canadian Solar panel system cost you, inclusive of warranty?
How large a battery system? Also, did it have a cutoff that disables the solar
panel system if you lose utility power?

~~~
FrankenPC
16 panels installed, Permitted, micro-inverter tech, with hard mounting rails
(through tile), not the easy hangars most people install with cost me out the
door 16K$. Then I got a 30% tax rebate from the feds. Everything has 25 year
warranty on it from manufacturers.

This is a grid tie system. No batteries. In the city we're not concerned with
100% off grid solutions. PG&E our provider has contracted with me as a power
provider. So excess power is banked and credited over a period of 12 months.

Also, the system is easily extensible. I'll be adding another 3KW for another
tax write off this year. No additional inspections required as the micro-
inverters don't need a central monolithic inverter which need to be increased
as the number of panels increases.

~~~
ghshephard
Thanks! So, I guess the two really interesting follow-on questions are - how
many kWh/year do you expect to generate, and how much is PG&E paying you per
kWh?

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aikah
Interesting case where U.S. protectionism promotes manufacturing over
developers and installers.

A political choice has been made.

Let's see how it goes in the long run.

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transfire
Meanwhile everything else at the Great Walmart is tariff free from China.

~~~
noobermin
I'd think that solar manufacturing is something that is politically desirable
in the eyes of the powers that be as opposed to manufacturing other goods.
Tariffing solar panels as opposed to these other goods is consistent with
that.

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Animats
This tariff would have been more useful to US manufacturers if it had been in
place before Applied Materials exited the solar cell business and Solyndra
went broke.

~~~
adventured
Given FirstSolar and SunPower are two of the world's largest solar
manufacturers, and compete directly with China, I'm sure they're both hoping
to benefit from the tariffs. They both outsell nearly every Chinese solar
player.

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ferongr
For some reason this story dropped way too fast off the front page.

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droope
Woah, what happened to the free market? :S

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hindsightbias
This plus falling oil prices is going to set back PV for a long time.

~~~
saryant
Except that oil accounts for all of 1% of US electricity generation.

[http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3](http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3)

~~~
AnthonyMouse
Natural gas is a petroleum product.

~~~
rab_oof
It's often burnt off because the quality / quantity / opportunity costs for
capture and resale are often insufficiently compared to other extracted
products.

~~~
saryant
That's not really true anymore.

~~~
rab_oof
What evidence do you have? Excess gas is routinely burned off nearby oil
derricks to this very day because it's not cost-effective to capture for
resale.

