Solar Geopolitics: Fair Trade Debate Moves From Europe to U.S.


“The concern I have is the China Development Bank has put forth at least $20 billion, and another $10 billion has come from local development banks. This is a staggering amount of money,” said Dan Shugar, CEO of California-based Solaria, who spoke on a roundtable at the Solar Power International in Los Angeles on Wednesday.

“The basic covenant at the World Trade Organization is that a country can stimulate a sector provided that the country is open to imports of other goods. China needs to open its market to other foreign suppliers.”

Shugar’s comment reflected the views expressed by other American and European solar company executives as they witness the quick rise of Chinese manufacturers in recent years. The Chinese government’s hefty financial support to these manufacturers has made fast and furious expansion of factories possible. That in turn has made Chinese-made modules cheap and abundant and raised the ire of other manufacturers who see an unfair trade practice.

The debate of fairness isn’t new, but you can expect to hear more about it as the U.S. market grows and the solar industry lobbying for more government subsidies to build factories. Rhone Resch, CEO of the Solar Energy Industries Association, declared the 10-gigawatt-per-year goal during his opening speech at the conference on Tuesday.

A market research by SEIA and GTM Research, released this week, predicts that between 944 megawatts of solar energy generation – 866MW of photovoltaics and 79MW of concentrating solar thermal – will be added in the U.S. in 2010. The forecast is a 114 percent jump over the 441MW in 2009. The new installation could reach as much as 1,130MW, the report says.

Many non-U.S. manufactures already are running factories here as they anticipate a boom in the U.S. market. Suntech Power opened a 30MW factory in Arizona last week. The solar panel assembly plant serves not only as a base of supply for the American market, it also will help the company brand its modules as “made in the U.S.A.,” a designation that can make a difference for consumers and business owners. Other manufacturers such as SolarWorld and Sharp all have touted their U.S. factories.

Terry Wang, chief financial officer of Trina Solar and a speaker at the roundtable, responds to Shugar’s comment by pointing out that what the Chinese manufacturers have achieved is for a greater good.

“I believe that the solar industry is global, and China’s (ability) in reducing the cost and increasing capacity is doing a good job … to reduce the burden on government and taxpayers’ burden,” Wang says.

Wang added that the U.S., too, could promote more “friendly and relaxed” lending policies that make it possible for solar companies to secure loans for factory expansion. “Then you can compete with China and other parts of the world,” says Wang, who was non-committal when asked whether Trina would open a factory in the U.S.

The discussion, also featuring executives from Standard Solar, PG&E Corp. and a member of the Colorado Public Utilities Commission, also touched on the importance and what speakers say are shortcomings in the federal and state policies to promote solar energy generation.

So far, state policies have driven much of the installations, from residential to utility-scale. But the policies don’t offer the same levels of incentives, and winning favorable state regulations can be a tough fight.

“Have you’ve ever seen the opening scene of “Saving Private Ryan?” That was what renewable energy advocates looked at every time they took it to the Legislature,” says Matt Baker from the Colorado Public Utilities Commission. Earlier this year, Colorado lawmakers voted for a bill that would require the state to get 30 percent of its electricity from renewable sources by 2020. Baker said a third of the required renewable energy could come from solar.

“We need a national (renewable portfolio standard) with set asides for technologies,” Baker says. “I don’t think carbon pricing will drive in the industry in the short term.”

Rand Rosenberg, senior vice president of corporate strategy and development at PG&E Corp., “It’d be terrific to have a national policy, but given the political environment in Washington, I don’t have a high level of confidence” that it will happen.

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