Fresh shots were fired this week in the global solar trade war. The United States is hitting Chinese and Taiwanese solar manufacturers with some big new import tariffs, as the Commerce Department alleges foreign firms are being propped up by subsidies in order to sell their products below cost. The FT reports:
The US Commerce department found that Chinese producers were selling below the cost of manufacture and benefiting from state subsidies, and set anti-dumping duties of up to 78.42 per cent on Chinese solar panels and of up to 27.55 per cent on solar cells from Taiwan. Anti-subsidy duties of up to 49.79 per cent on Chinese modules were also announced. […]US manufacturers praised the move, saying it closed a loophole in import duties imposed in 2012 that allowed Chinese companies to sell at illegally low prices in the American market.
More expensive Chinese components means more expensive panels for consumers. The timing of this couldn’t be worse, as plunging oil prices are already putting the squeeze on more expensive renewables. The FT explains:
A large chunk of [clean energy] investment has been powered by the growth of renewable energy subsidies and analysts say a sustained bout of cheap oil dents the arguments many governments make that consumers are better off funding renewables because fossil fuel prices are likely to rise while wind and solar prices fall.
But now, we’re seeing the exact opposite dynamic at play: Oil prices are falling while solar costs look sure to rise. That is going to put tremendous pressure on subsidy regimes, and undermine the case that countries like Germany have been making: that the era of fossil fuels is coming to a close and green energy is ready to take off.Moreover, this U.S.-China solar trade spat is a sign of a deeper malaise in the global solar industry. At the national level, policymakers are busy subsidizing their own level of solar panel manufacturing, while decrying similar efforts in other parts of the world. What we’re left with is a wacky web of subsidies at nearly every level of production—a clear indication that solar’s day has not yet arrived.