Et Tu, SolarWorld?06. December 2011 By: Jigar Shah, CASE, SunEdison
Jigar Shah, co-founder of the Coalition for Affordable Solar Energy and the founder of SunEdison, argues that if successful, SolarWorld’s survival will come at the expense of the U.S. solar industry.
For the last decade, forward-thinking governments around the world, such as Germany, Japan, and California, have provided the solar industry and solar companies with subsidies. This is no secret. SolarWorld, too, has been a direct beneficiary, receiving millions of dollars in tax breaks and government support in Germany, Qatar, and the United States. In Oregon, they reportedly pay US$10 per year in state taxes, and recently sold extra tax credits to Wal-Mart for millions more. The list goes on. But apparently, all of that government support is not enough for SolarWorld, who complains that the subsidies it has received are inferior to those provided to competitors.
On the whole, government investments in the global solar industry have been remarkably successful, creating millions of jobs globally and bringing solar technology to the cusp of widespread grid parity. Global competition and innovation have been ruthless in driving productivity and efficiency throughout the solar value chain, slashing the price of solar electricity by an average of five to 10 percent per year.
This isn’t some unsustainable phenomenon spurred by recent Chinese investments, as SolarWorld argues, but a steady, three-decade trend that has drawn on the strengths of researchers, companies, and governments around the world. The consistent, unyielding pace of the solar industry’s learning curve is unprecedented in the history of energy technology, and remains our primary source of credibility amongst policymakers and the general public.
The inability of certain companies to compete is not a sign of policy failure – just the opposite. It’s a symptom of the solar industry’s success. Today, the global market for solar panels is more competitive than ever, and only high-quality, bankable, highly-efficient producers will survive. Over the last six months, more than 50 China-based photovoltaic manufacturers with thousands of jobs have closed shop, no longer able to compete in the maturing global solar industry. And many more casualties are likely to emerge in the months ahead.
However, because of global competition, solar electricity is already competitive with traditional energy sources in some regions, driving industry growth and creating thousands of new jobs. SolarWorld, too, depends on global supply networks, as they are reportedly moving operations to Qatar and possibly India, and have historically relied on major Chinese cell and module suppliers in order to produce the highest quality, lowest cost products possible.
SolarWorld is pleading for government intervention to thwart competition, even though trade barriers would be devastating for the U.S. solar industry. Make no mistake: if successful, SolarWorld’s survival would come at the expense of the U.S. solar industry.
Trade barriers would cause an exogenous shock to the price of solar panels and solar electricity, threatening to upend thousands of megawatts of signed electricity contracts and renewable portfolio standards. That would also jeopardize thousands of American jobs at thousands of solar companies across the country. Let’s not forget, the vast majority of U.S. solar industry jobs are created after module manufacturing in the development and construction of solar projects, and depend on high-quality, low-cost products to succeed.
But it’s not just downstream installers that would suffer in a trade conflict. The U.S. is a net exporter of solar products to China by more than US$250 million, and to the world by nearly US$2 billion, as many U.S. companies are world-leaders in manufacturing polysilicon, the key ingredient for solar panels, and processing equipment used to produce solar wafers, cells and panels.
Since SolarWorld fired the first shots, China-based photovoltaic companies are now threatening to retaliate against upstream U.S. solar companies, a move that would destroy America’s positive solar trade balance. The national Solar Energy Industries Association, SEIA, now needs to manage a highly public industry crisis instead of focusing policymakers on the need for cash grant extensions and other priority policy needs.
Trade wars and protectionism breed inefficiency and higher prices, create market distortions, and destroy jobs. That’s why none of the major U.S. photovoltaic manufacturers support SolarWorld’s actions. That’s why, in just three weeks, more than 130 companies representing more than 13,000 American jobs have joined the Coalition for Affordable Solar Energy (CASE) to express concern about the potential impact of SolarWorld’s actions on the American solar industry. CASE hasn’t had the benefit of a half-year, multimillion-dollar PR campaign, but the solar industry is fast-uniting to preserve American jobs and the future of the global solar industry.
As Vote Solar Director Adam Browning remarked, this trade fight is a "circular firing squad where everyone gets hurt." That’s true, except for those who benefit from the collateral damage and the elimination of competition. Solar critics quietly cheer SolarWorld’s crusade – and it’s easy to see why. They’re content to sit back as the American solar industry turns on itself, as solar projects are abandoned, and as the price of solar electricity retreats upwards. They’ll use our instability and infighting as a weapon to argue that solar technology was always a pipe-dream and prove that dirty fuels are required for stability.
With this selfish campaign, SolarWorld has instigated confusion and political uncertainty in the U.S. solar industry, while putting thousands of upstream and downstream jobs at risk. As with any industry, from a national viewpoint, the solar industry’s overall success is paramount to the fate of any one company. What good is the success of one company if our industry fails to deliver? This unity has been critical to defending solar from powerful skeptics and those who fear changes in the way the world produces and consumes energy.
While each company wants to win, we all recognize that competition will make us all stronger, and do not wish ill upon our rivals. We all take pride in the idea that whether or not our individual companies survive and prosper, the solar industry is better because we competed. That’s the American way.
SolarWorld no longer shares that vision.
PV poll of the week
- 3015 views
- 3007 views
- 2944 views
- 2573 views
- 2322 views