Politics & Policy

Chinese Solar Panels Subject to Tariffs

The most expensive form of energy now gets even more help from the government.

The federal government last week approved a hypocritical trade measure that not only undermines the president’s environmental goals but also increases costs for U.S. consumers.

Most Chinese solar panels will now be subject to tariffs of about 24 to 36 percent, the U.S. International Trade Commission unanimously decided this week. They were responding to an anti-dumping suit filed by German-owned solar-panel manufacturer SolarWorld, alongside six American manufacturers, many of whom opted to remain anonymous.

These panel manufacturers have every reason to be secretive. In protecting their own products from cheaper Chinese panels “dumped” into the U.S. market, they’re screwing over other segments of the U.S. solar industry, including solar-panel installers and companies that use panels as an input for electronic products and will now have to cope with higher prices caused by the tariffs.

Moreover, the tariffs undermine the president’s green agenda. If the U.S. really wants to increase its reliance on alternative energy, as Obama has so often claimed, the uncompetitive domestic solar market could use all the cost-cutting help Beijing can provide.

As it is, solar is the most expensive energy source out there, surpassing not only coal and gas but also wind, nuclear, hydro, and geothermal energy. That has been the case even though Chinese subsidies have provided American consumers with artificially cheap solar panels. With the new tariffs in place, the solar prices will only rise, making it an even less feasible energy source.

And then there’s the principle of the thing. Without a doubt, China pours billions into its solar sector. But so does the U.S..

The federal government spent $1.134 billion on solar subsidies in 2010 alone, the most recent year analyzed by the Energy Information Administration. And let’s not forget the $13.27 billion in Department of Energy loans to solar companies, or the $2.1 billion lavished on the solar industry from the Treasury’s 1603 tax-grant program, to name a few of the notable solar-subsidy programs. The Institute for Energy Research analyzed government energy handouts per megawatt hour and found that the U.S. props up solar to the tune of $775.64 per unit. In comparison, natural gas, coal, and oil get 64 cents of subsidies per unit.

And, in a final irony, many of those American-made, American-subsidized solar products ship straight to China.

But when the panels are headed the other way across the Pacific Ocean, to the U.S. from China, we call it “dumping” and penalize it with fury. Looks like it’s idiocy’s day in the sun.

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.

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