The Coming U.S.-China Solar War

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It’s been a schizophrenic time for the U.S. solar industry. On the one hand, about $11 billion worth of solar power is set to be installed in 2012, with more than five times that figure in the investment pipeline. Demand for solar power rose eightfold between 2006 and 2011 — from 200 MW to 1,600 MW. Nationally, the solar industry employs some 100,000 Americans, a number that rose by nearly 7% last year — even as overall employment barely grew at all.

Despite those rosy numbers, many U.S. solar companies — especially those that manufacture solar panels and modules — are struggling to survive. Most notably, the solar start-up Solyndra went under in 2011, taking with it over $500 million in government loan guarantees. The Bloomberg Large Solar Energy Index of 17 top solar companies lost more than two-thirds of its value in 2011.

In other words, if you’re buying solar panels or running a business installing them, life is good, but if you own a company that actually makes solar equipment in the U.S., you’re looking at a lot of red ink. That’s because solar power is getting much cheaper — prices for modules have dropped 40% over the past five years. According to some U.S. solar-panel manufacturers, that drop in price is due largely to low-cost imports from Chinese panelmakers. It’s not that their manufacturing methods are necessarily better than ours. It’s that government support from Beijing and low-cost labor make it easy for China to undercut its U.S. competitors. The result is more and cheaper solar power for Americans — but perhaps less market share for U.S. manufacturers.
Read the full article on Time.com.

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