Beijing’s National Development and Reform Commission for years showed little interest in subsidizing domestic solar use, and a “Golden Sun” project subsidized by the ministries of finance and construction was plagued by corruption, poor planning and inferior products, Fathom China said. Ningxia province, beset by dust and pollution, found that every one of its 160,000 panels needed to be wiped clean four times a year. And the coal-dominated electricity grid is not suited to accommodate large amounts of fluctuating solar power.
But in the new five-year plan, the Chinese government has set a goal of generating 20 gigawatts of electricity with solar by 2020. That would represent just 1 percent of China’s expected power generation, but it would be roughly equal to the world’s total installed capacity. That could mean subsidies similar to Europe’s “feed-in tariffs,” which guarantee artificially high prices to solar energy producers. Such subsidies could tilt Chinese solar panel production toward the Chinese domestic market, potentially a positive development for U.S. manufacturers.
Will the best win?
China isn’t the only one handing out subsidies.
Indeed, Chinese authorities have said they would investigate U.S. subsidies to solar manufacturers. Those include a 30 percent production tax credit, investment tax credits, research and development grants, and the Energy Department’s recent loan guarantees. In addition, renewable energy standards in about 30 states are requiring electric utilities to boost the share of renewables in their power-generation portfolios, essentially forcing them to buy solar even if at higher prices, a subsidy hidden in utility rates paid by consumers.
“The support we have received in China is no different and perhaps significantly less than what we’ve seen many companies in the United States and Europe, and Germany in particular, receive,” said Suntech’s Beebe.
Meanwhile the U.S. solar industry is divided over the dumping case.
Some U.S. companies opposed to the dumping case note that SolarWorld received aid from Oregon to set up a solar cell factory there and that it will receive assistance from the government of Qatar for a joint venture producing polysilicon there. SolarWorld said that it has taken $11 million of Oregon tax credits, but added that those credits are “available to companies of all nationalities” and offset “less than 2 percent” of its more than $500 million investment in Oregon.
A SolarWorld spokesman said that the company does not "argue that subsidies are inherently improper,” but rather “that it is illegal for one country’s subsidies to fund its producers in mounting a predatory export drive that hobbles domestic producers of a foreign market — exactly what China has done.”
The Coalition for Affordable Solar Energy, by contrast, includes firms involved in installation, which accounts for 52 percent of the solar industry jobs, the group says. For them, cheap panels mean more demand, regardless of where the panels come from. (SolarWorld says that installers, not consumers, have profited from falling panel prices.)
Then there are solar manufacturers that use thin-film technology, which is cheaper, though less efficient, than photovoltaic panels using crystalline polysilicon. First Solar, an Arizona company with plants in Germany, Malaysia and Ohio, is the industry leader and building a plant in Arizona. General Electric is spending $600 million to open a thin-film plant in Colorado.
GE’s Victor Abate, vice president of renewables, said in an interview: “The price of solar had to come down for it to become mainstream. . . . The question is, can you compete? And that depends on technology. The best technology is going to win here.”
“It’s a race,” DeLine said of solar panel manufacturing, “and it’s not just the Chinese.”
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