We’re in the slow-motion throes of an environmental apocalypse whose existential ravages, according to the latest Intergovernmental Panel on Climate Change (IPCC) report, are terrifyingly “irreversible.” Now is not the time to be arguing over solar cash. But we are, and with tragicomedy of Shakespearean proportions.
In the last few years, America and Germany have attacked and penalized China for “dumping” cheap solar panels on Wall Street and Main Street, while coal, oil, gas, methane and other dirty fuels destroy the world as we know it. That’s the macrocosmic perspective, which is lacking in primary offender SolarWorld, which isn’t even arguing for local photovoltaic production to bring emissions down.
“The solar supply chain, from polysilicon and conductive pastes to junction boxes to connectors, is truly global,” Coalition for Affordable Solar Energy (CASE) president and SunEdison founder Jigar Shah told me. “Solar panels made in China use components from around the world, including the U.S., while solar panels made in the U.S. use components from around the world, including China. Even SolarWorld imports materials, as the their proposed ‘two out of three’ rule for determining a productÕs origin strongly suggests.”
“We should recognize that the laws were never created for one German individual that happens to own SolarWorld to establish U.S. foreign policy on global solar trade,” Shah added. “Free and fair trade is the best way to promote the growth of the entire solar value chain, from manufacturers to installers.”
But instead, thanks to our international solar war, we are distracted by more microcosmic regional distractions, like “illegal protection,” “anti-dumping” and other legalese holding up accelerated global solar adoption. The result is an unnecessary impasse: Instead of solar now, everywhere for everyone, with no excuses, what we are left with are corporations and governments putting their profits and priorities before the health and wealth of their people, with global warming exponentially frying what’s left of the balance.
OK, Who Started It?
China, Earth’s current king of solar panel manufacturing. Since 2008, China has beat the world when it comes to international photovoltaic production, a sector that was previously dominated by Germany, Japan and the United States. This dramatic shift in renewable energy from the largest manufacturing economy in the world, which also happens to be the fastest-growing economy in the world, has galvanized the global focus on solar, and set the bar high for anyone who can’t keep up.
“In the Race For Solar Power, China is Winning,” recently argued The Christian Science Monitor, not really known for its socialist agenda. That is what happens when a country installs, as of this writing, 23 gigawatts of solar capacity, on the way to 35 gigawatts by 2015, thanks to quite generous government incentivization. Last year, Pew Charitable Trust found China widely leading the world in clean energy investment and capacity with 191 gigawatts. Last month, China’s National Energy Administration announced even more incentives for what Bloomberg called “so-called distributed solar.”
In other words, China is now routing even more cash and policy into solarizing its schools, airports, railways, businesses, greenhouses, abandoned land and more, using everything from discounted loans with relaxed lending terms to PV funds formed by trusts and other financiers. One would hope that this promising development would stimulate other nations to step up, as the United States did with the American Recovery and Reinvestment Act of 2009, which directed $27 billion toward renewable energy and efficiency investment and research.
But one can hope for anything.
“The solar growth story is likely to be centered in China, at least for the foreseeable future,” the Monitor concluded, citing the massive nation’s “environmental imperative” as backup. But zeroing in on China’s astounding solar growth as a response to its choking pollution, a fifth of which is emitted while manufacturing goods for America, is missing the forest for the trees. China’s microcosmic emissions problem is no different than our macrocosmic global warming, which is why the nation is also pondering consumer gas taxes and decoupling coal from GDP.
In the final analysis, if we’re judging accelerated solarization as a response to local and global warming, China is walking the walk, these days ahead of most everyone else.
Wait, What Were We Talking About?
And yet, according some unhappy customers, China’s solar walk should go directly jail without passing Go or cashing its check, to paraphrase Monopoly — which, geeks note, is rooted in Georgist economic theory arguing that “economic value derived from natural resources and natural opportunities should belong equally to all residents of a community.” Far from being a socialist solarizer, Attorney General Eric Holder more recently argued, China is instead “a foreign nation [which] uses military or intelligence resources and tools against an American executive or corporation to obtain trade secrets or sensitive business information for the benefit of its state-owned companies.”
Holder’s condemnation arrived earlier this year after the Department of Justice symbolically charged five Chinese People’s Liberation Army soldiers with hacking American corporations, including SolarWorld, which is really a German company with two facilities in the United States. Justice’s charge was accompanied by cheesy “Wanted By the FBI” posters featuring mugshots and a fair amount of hilarity, given the scorn still suffered by the U.S. for its unauthorized surveillance of its own people, as well as international authorities like German chancellor Andrea Merkel. That such revelations came thanks to disclosures from American hackers Chelsea Manning and Edward Snowden, a soldier and a NSA analyst, made America’s moral high ground even shakier.
Whether or not the “unacceptable” U.S. spying on Merkel was known to SolarWorld CEO Frank Asbeck, who claimed to travel often with her, is for now a trade secret.
But it is no secret that Asbeck and SolarWorld — represented by Nova Daly, former National Security Council director for international trade for the oil-rich Bush administration — are dead serious in their efforts to convince the Obama administration slow China’s solar momentum. “How can you produce anything in the U.S., as long as Chinese are paid like donkeys?” Asbeck argued in a 2010 “swashbuckling entrepreneur” profile, charting his rise from Nigerian palm oil processor to today’s “big, brash executive” who defiantly drives a gas-guzzling Maserati, yet thinks twice about building a compound of Zimbabwean lions for his Bonn headquarters.
“[The Chinese] build huge capacity, overflood the market and ruin established industries in the countries that they target,” Asbeck argued. “It’s a very rude and simple strategy.”
In 2011, Asbeck and SolarWorld hired lawyers to lobby the Commerce Department against Chinese solar imports, according to the New York Times, and was quickly rewarded with steep tariffs in 2012. SolarWorld proceed to argue for further relief, and got it more than once from a department that can’t seem to make up its mind. Adjustments routinely arrive as business and moods change; last month, a Commerce “ministerial error” even prompted SolarWorld to petition lower rates for Taiwanese manufacturers like Motech.
It’s business, the cliche goes. Some companies pay high and some pay low. Trina — which supplied American installation leader SolarCity with panels, before Elon Musk and the Rive Bros bought Silevo and set about planning the largest solar factory in the U.S. — pays a bit under 30 percent. Yingli, Canadian Solar and Suntech pay closer to 50 percent. Commerce’s current tariffs vary between 26 and 165 percent. The numbers spin onward, and could change again.
Wait, are you falling asleep?
Why Is Everyone Leaving?
This collision of numbing legalese and fluctuating penalties threatens to put the solar revolution to sleep, when all nations to “build huge capacity” like China — and the record-breaking world leader Germany, which meets almost 75 percent of demand with renewable energy. But SolarWorld’s brashness, the Department of Justice’s symbolism and the Department of Commerce’s seemingly arbitrary tariffs are threatening solarization both home and abroad, sowing price confusion, slowing factories and creating artificial scarcities, which in turn is keeping the renewable energy industry from achieving its potential. In the process, the solar war is adding unneeded credence and legal precedents to a growing anti-solar backlash, whose roots lead obviously back to obsolete fossil fuel monopolists like the Koch Brothers. Thanks to their reactionary lobbyists like ALEC (and worse), serious talks about net metering and other solar taxes are promising Americans more global warming dystopia instead of resilient sunshine smartgrids.
“According to industry analysts at Greentech Media, prices will rise by 14% as a result of these tariffs,” Shah explained. “This means projects that were economically viable previously are no longer moving forward, and that going solar is a less attractive investment for homeowners. Getting to the heart of the issue, this means that solar power is moving further away from grid parity Ð our industryÕs long-time goal. While conditions have already become more difficult, the real test for solar power in the U.S. may be in 2015, if Congress should allow the 30% solar investment tax credit to expire while also raising prices through tariffs on imported solar modules. The current trade dispute is sure to have long-term repercussions unless a negotiated settlement is reached quickly.”
Good luck with that, getting back to SolarWorld.
“I ask that you cease your improper, divisive rhetoric and advocacy of obsolete proposals, both of which can only thwart progress toward a viable and lasting agreement,” its president Mukesh Dulani complained to Solar Energy Industries Association, which declined to comment for this explainer.
SEIA’s offense? Reasonable appeals from CEO Rhone Resch like, “ItÕs time to end this needless litigation with a negotiated solution that addresses SolarWorldÕs trade allegations while ensuring the continued growth of the U.S. solar market.” That Dulani responded to SEIA’s plea for detente so combatively is made more tragicomic by the fact that he sent it after SolarWorld was awarded its tariffs by the Department of Commerce. You can’t please everyone.
“I don’t think SolarWorld is really competitive, and as the leading company behind this dispute, I’m not sure it will ever agree to a non-legal negotiation,” CleanTechnica director Zachary Shahan told me. “I don’t think this dispute going to have a huge impact in the end, but I think it is raising prices, delaying production and causing uncertainty, which can only hurt consumers.”
“The ideal solution is a negotiated settlement that addresses the concerns of all parties, while allowing the industry to continue growing,” said Shah. “Raising the price of solar power through tariffs, taxes and trade barriers threatens the growth of the solar industry in the United States. For widespread solar adoption to become a reality, it must be able to compete on cost with traditional sources of energy, including fossil fuels, which are heavily subsidized around the world. Our industry is already feeling the impact of increased prices in the U.S. and E.U., especially Germany, which offers an excellent case study for the consequences of price increases.”
Let’s Move On, Shall We?
Unlike SolarWorld, other, arguably much better American solar powers have managed to do just fine and break the innovation curve created by tariffs and taxes.
First Solar, which has lately managed to keep revenue high and debt low, has brought its stock back from the depths while landing new project after project, most recently for a 250 megawatt facility in Japan. But these achievements are aided far more by generous incentives, like Japanese feed-in-tariffs, than they are from the protection schemes of SolarWorld. Do we even need to speak of SunPower and SolarCity, the first of which is the longtime U.S. leader in conversion efficiency while the second was started by financiers with the bright idea of giving people zero-down solar loans (and power), in return for recurring payments and decreasing emissions? Is asking the Department of Commerce to raise tariffs encouraging Chinese manufacturers like Yingli to build factories in America really a better idea than encouraging America do so itself, further cutting emissions? Is a surprise to anyone that the World Trade Organization has ruled that, thanks to its suspicious protections, the U.S. is violating global trade rules?
Even future-forward crowdfunders like Mosaic aren’t really helped or hindered by SolarWorld’s intransigence, which is so 20th-century compared to 21st-century P2P sunshine.
“Mosaic is at the crossroads of two exciting growth industries: solar and peer-to-peer lending,” new COO Bruce Ledesma, recently executive vice-president and general counsel of Sunpower, told me. “This puts us as the forefront of the widely-acknowledged shift from leasing to ownership. We intend to leverage our flexibility as a young company to rapidly adjust our loan pricing as needed in any cost environment to maintain our competitive edge, including an environment of price increases caused by tariffs.”
The point of all this, to recall Shah, is that no one person, or company, or nation, should be able to stand in the way of any solar momentum. We don’t have all the time in the world, after all. When it comes to exponential warming, mounting superstorms and punishing megadroughts, our first global priority is to solarize everything in sight. Crisis opportunists like SolarWorld — headquartered in Germany while underperforming in America — shouldn’t be given official license to stall our photovoltaic momentum. Especially if they are making no green arguments of their own, while decrying others responding to the defining “environmental imperative” of our time, perhaps all time.
These are not hollow arguments.
“The solar industry is experiencing remarkable growth,” seven U.S. senators wrote (PDF) to U.S. vice-president Joe Biden in April. “From panels sales and installation to panel and component manufacturing, growth in the solar industry is an outstanding opportunity to create high-paying jobs and enhance our energy security. That is why it is critical that the administration engage with all U.S. stakeholders to resolve this trade dispute as quickly as possible.”
This article appeared at Solar Energy