With China becoming the world’s leader of solar cells and panels, it was hoped that their mass production would help bring down global prices. However, in order to aid domestic manufacturing, the US has hampered such progress by imposing tariffs of as much as 250 percent on Chinese-made solar cells. While the decision was made to protect US solar production against foreign competition, it is expected that it will ultimately raise PV cell prices and hurt the domestic renewable energy industry.

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The decision came after the US Commerce Department ruled Chinese companies were benefiting too much from government subsidies that allowed them to sell solar products below cost. As a result, the US announced preliminary antidumping duties ranging from 31 percent to 250 percent, depending on the manufacturer. China is of course furious at the action, saying the US is not only hurting itself, but also cooperation between the world’s two largest economies.

In the past year, the US solar industry has been crippled by foreign competition from China and Germany, with four companies filing for bankruptcy. While the new tariffs are designed to “level the playing field”, experts think that they will only result in driving up prices in US solar projects.

Speaking to Bloomberg,  Shyam Mehta, an analyst with GTM Research in Boston said: “China-based manufacturers would certainly have to raise U.S. prices to turn a profit. This is likely to lead to module price increases in the U.S., which would serve to dampen demand and installation growth.”

US solar companies, such as SolarWorld have welcomed the tariffs saying they “give rise to the possibility that domestic solar manufacturing, environmentally sustainable solar production and robust global competition might one day soon return, boosting U.S. manufacturing jobs.”

China has said they are “highly concerned” by the action, and that the US is not only damaging relations between the two countries, but also the field of clean energy. Shen Danyang, a spokesman for China’s Commerce Ministry, said the nation is “strongly dissatisfied” with the “unfair” U.S. judgment, which shows America’s inclination toward protectionism.

China is urging the U.S. Commerce Department to correct the action.

Where do you stand? Is it important that solar cells are cheap enough for everyone to enjoy? Should the US subsidise domestic companies like the Chinese do rather than simply implementing tariffs? Is the US’ protectionism clouding the bigger environmental picture?

+ US Commerce Department

Via Bloomberg / The Guardian

Images: Dave Dugdale and Abi Skipp