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Welcome to the Energy & Environment (E&E) Exchange, a blog dedicated to science and engineering topics that are (generally) related to energy and the environment. This blog is meant to encourage discussion about the challenges and possibilities surrounding sustainability through science and technology. The blog's owner, cheme_wordsmithy, is a former technical writer and engineering editor at IEEE GlobalSpec, the company that powers CR4.

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Solar Power: The Best of Times and Worst of Times

Posted December 21, 2011 9:30 AM by cheme_wordsmithy

Nothing spoils good news like a bad argument. So it goes for the solar industry, as excitement for technology advancements may be stifled by trade conflict between the U.S. and China.

The solar industry has seen a continuing reduction in solar energy costs and a resulting increase in solar photovoltaic (PV) production over the years as solar companies continue to make technology advancements and reduce costs. The trends can be seen over the course of thirty years through collections of market and company reports shown below.

Between 2009 and 2010, worldwide PV production capacity more than doubled and has continued to increase in 2011. Some news reports over the past few months have been especially positive for the industry, indicating sizeable increases in solar capacity and lower utility bills for states such as California and Arizona.

Some markets have reported reaching grid parity, in which solar electricity without subsidies costs less than that purchased from the grid. As these markets expand, solar power has the potential to play a much larger role in energy production.

But the continuing success of the solar industry rides on successful competition and cooperation between its leaders. Companies in Germany, China, and the U.S. all play different roles in driving down costs. In short, Germany provides high-precision mass-production equipment, the U.S. provides low cost silicon, and China provides low-cost manufacturing. Trade and dependency between the countries is what has allowed for the industry's steady growth over time.

This cooperation is threatened by the brewing conflict between the U.S. and China, where trade protectionism could halt global progress. On October 18, the U.S. government was asked to impose tariffs on imports of Chinese solar products, arguing that Chinese subsidies created unfair competition. In response, Chinese companies are asking for tariffs on American solar products.

On Friday, December 2, the U.S. federal trade panel unanimously voted to continue anti-dumping and countervailing policies for Chinese solar panels. The intention is to protect American jobs and U.S.-based solar companies whose economic security is threatened by China's success. Unfortunately, these actions result in PV price hikes for everyone, and reduce the room for new solar technologies to pursue growth.

In reality, China's solar production success is not due to cheap labor or state subsidies, but from the fast and cheap means by which the facilities can be built. In the U.S., building and land permits take a lot of time and money, and this is where China saves the most on costs.

It seems unlikely that the current political mindset on protectionism in competition will give the solar industry what it needs to thrive. And while there are potential losses for the limited U.S. solar manufacturing sector without tariffs, there are definite losses for the solar industry's future on a global scale with these policies in place.

Certainly the development of the solar industry has been international, and the hope is for it to continue to be.

Source: Technology Review

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Join Date: Dec 2011
Location: SH
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#1

Re: Solar Power: The Best of Times and Worst of Times

12/22/2011 12:07 AM

The conflict between China and US is raised by a non-America solar company, to maintain his own market shares and profit. It will really slow down the system cost down process.

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Join Date: Feb 2011
Location: Greenville, SC
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#2

Re: Solar Power: The Best of Times and Worst of Times

12/27/2011 6:38 AM

China does indeed provide subsidies to their PV industry. For instance, the LDK plant in Xinyu City was provided with free electrical infrasturture for the high voltage feeds and all of the initial grading of the site was provided by the government. The price of electrcity is also provided at favorable rates and is below the cost to produce it.

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Join Date: Dec 2011
Location: SH
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#3
In reply to #2

Re: Solar Power: The Best of Times and Worst of Times

12/27/2011 7:46 AM

I won't comment on the unproved data. Just curious, where did you get this information on LDK? Let me have a check.

But on the other hand, it is a very common kind of activity to attract investment, especially for some developing regions. And solar is the pillar industry in Xinyu which is not a well developed city, so pls do not keep your mind in this economical policy.

Frankly speaking, I would like the solar modules to be used in China, to generate more green energy for the local economic growth. Yes, anti-dumping and countervailing may have the same effect of decreasing solar modules sold in US, but it should not be the right way.

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