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Monday, 19 December 2011

A Solar Trade War Could Put Us All in the Dark

Technology Review
Dec 19, 2011

Credit: Brian Bailey

The brewing solar trade war between the United States and China sullies what should be a triumphant moment in the global photovoltaic (PV) industry: the arrival of affordable solar electricity.

After decades of global competition and collaboration, many solar markets around the world have reached grid parity—the point at which generating solar electricity, without subsidies, costs less than the electricity purchased from the grid. In other words, solar technology is ready to be a major contributor to solving our planet's energy and environmental crisis.

However, trade protectionism threatens to inhibit the solar industry at the very time when it is breaking through to a new level of global interdependence, collaboration, and maturity.

On October 18, the U.S. government was asked to impose tariffs on imports of Chinese solar cells and modules, based on the argument that China-based producers have been heavily subsidized and are selling solar products at unfairly low prices. Perhaps not surprisingly, some Chinese companies have now asked the Chinese government to impose tariffs on imports of American solar products, arguing that U.S.-based producers have been heavily subsidized, too. And just like that, the production of affordable and competitive solar products has become a political liability in the world's two largest producers and consumers of energy.

The success of the entire solar industry hinges on the success of not one country or one company, but global competition and collaboration, which drives efficiency improvements and cost reductions worldwide. If trade barriers are imposed in the U.S., China, or Germany, it could cause a significant increase in the price of solar products and therefore solar electricity, globally. That could cause a further erosion of political support for the solar industry at a critical juncture.

Altogether, a solar trade war could undermine decades of international innovation and stall the global adoption of advanced solar technology.
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