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EU Tired of China Cheating in Solar

A dispute over solar panels may be sparking a minor trade war between Europe and China. The EU’s trade commissioner is proposing a 40 percent levy on cheap Chinese solar panels in a bid to save Europe’s struggling domestic production. The Financial Times reports:

[One struggling German solar panel producer] contended that Chinese competitors used illegal government subsidies, including cheap financing, to undercut it on pricing and take over more than 80 per cent of the EU solar market, the world’s largest.

However, the plan to impose duties has drawn frantic opposition from other elements of the European solar industry, which have benefited from inexpensive Chinese products. The many small companies that install panels on roofs and homes and Wacker Chemical, a key supplier of polysilicon, the main ingredient in photovoltaic cells, have warned that higher duties will hurt the industry and cost more European jobs than they save.

European industry seems split over the issue. On the one hand, consumers and suppliers of auxiliary solar products (the kinds of products China isn’t selling) are thrilled that solar panels are so cheap. But European panel producers are calling foul, arguing that Beijing is effectively cheating by offering massive government subsidies to its producers.

These subsidies aren’t just bad for European production. China’s solar industry is going bankrupt because its government financed a massive oversupply of solar panels. Chinese suppliers were banking on Europe’s growing demand and bargain-basement prices to turn this mess around. If Europe isn’t willing to play ball, there’s little hope that China’s solar industry can stave off implosion.

The solar industry has one serious problem: If it isn’t subsidized, it doesn’t work. As it is, neither the Chinese nor the Europeans have figured out how to build a healthy market. Instead of propping up the industry with government subsidies and tariffs, countries should invest in research and development aimed at getting solar panel efficiency up and bringing costs down.

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  • J R Yankovic

    “The solar industry has one serious problem: If it isn’t subsidized, it doesn’t work. As it is, neither the Chinese nor the Europeans have figured out how to build a healthy market. Instead of propping up the industry with government subsidies and tariffs, countries should invest in research and development aimed at getting solar panel efficiency up and bringing costs down.”

    IMO, excellent advice. The problem is that
    you’re trying to advise two geopolitical entities – modern Europe and modern China – which believe themselves either to be above or to have somehow transcended common sense. To say nothing of history. That problem is further compounded, as I read it, by something else that’s been going on for quite some time. Namely by the fact that, for far too long, a vast spectrum of US and Western opinion (including many elements – Keynesians, austerians, etc – otherwise convinced that they hate each other) has been united in its belief in the Euro/Sino experiments as some irresistible dual wave of the future. Which for all we know it may be: the fact that the times are moving furiously in a certain direction doesn’t mean they’re

    not headed straight for a dead end, or a cliff, or an impenetrably, inhospitably dense jungle. Why, even the periodic brick wall can be educational.

    Meanwhile, for my part I refuse to believe that the bold Murrayian meritocracy presently taking shape across the globe could seriously have been wrong about something so fundamental. And in any case, who’s to say what’s “wrong” anyway? This is an age of brazen, even damn-the-consequences experiment. Which is itself the particular privilege of up-by-your-bootstraps meritocrats. Subsidized “renewables” industry may or may not become THE energy wave of the future. But if it doesn’t, I’m sure the Europeans and the Chinese will come to that enlightened discovery entirely on their own – bold, pioneering souls that they are – with no
    help from Via Meadia, thank you very much.

  • Fat_Man

    “countries should invest in research and development aimed at getting solar panel efficiency up and bringing costs down.”

    You write something like that every time you discuss energy policy. The problem with it is that such research programs completely miss the real problem.

    There are 8760 hours in a year. Of those, no solar panel could possibly produce a single joule of energy during 4380 of them because they are night hours. This means that any solar system must be supplemented by a non solar system that can be guaranteed to produce power during those hours.

    Further, daylight hours are not uniformly distributed throughout the year. At 40 degrees north latitude, July will get approximately 180 hours more daylight hours than January. But, people need energy far more in January than in July, because there is a far greater variance between survivable temperatures and usable light in January than there is in July. This means that the back-up or storage system must have the capacity to get people through January when days are short, cloudy, and cold.

    The total consequence is that the back up system must provide more and more reliable energy than the solar system. The capital costs of such a combined solar and back-up system are and always will be unaffordable.

    Further, all of this discussion applies more to Europe than it does to anywhere else. We speak glibly of southern Europe. But, Athens, Madrid, and Rome are north of Richmond, Philadelphia, and New York respectively. And Northern Europe is really very far North. The southern most point in Germany is about the same latitude as Bemidji MN, and Munich is farther north than the northern tip of Maine.

    Solar energy might be a useful supplement to grid energy in California and Arizona, and it might be a life saver in the African Bush or rural India. But, for Europe and most of the US it is an economic waste and would be no matter how cheap or how efficient the panels are.

  • http://www.facebook.com/people/Luke-Lea/579129865 Luke Lea

    Instead of propping up the industry with government subsidies and tariffs, countries should invest in research and development

    As if there weren’t tons of research and development going on already. The real answer is to wait for a breakthrough.

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