Solar: Smart Policies, not Trade War

By Adam Browning and Jigar Shah
SolidarityEconomy.net via Politico.com

Nov 8, 2011 - The German company SolarWorld recently filed a trade complaint against China. The claim: China’s government has unfairly supported its domestic solar industry, and the U.S. solar industry can’t compete.

If there’s wrongdoing afoot, it should be addressed. But it is important to remember the big picture—the solar industry exists in a globalized market, and solar’s market growth depends on continuing to bring down costs. A trade war with China could close off America’s $1.9 billion net solar exports, raise prices for local solar markets (reducing U.S. solar demand) and hurt consumers and the more than 5,000 U.S. companies that support solar installation.

Countries around the world have cumulatively invested tens of billions of dollars in solar energy over the last five years — a tremendous increase over the previous decade. That’s true of China — just as it’s true of Spain, Taiwan, Malaysia, India, Germany, Italy, Japan and the U.S. This investment has paid off in spades — global manufacturing capacity has soared. In the United States, solar is the fastest growing energy source.

It’s true that the U.S. share of solar investment lags behind China’s. Sadly, Uncle Sam’s investment in solar also falls far short of its support for fossil energy resources — which have a century-long history of continuing federal support. U.S. government subsidies for nuclear, oil, coal, gas and fossil fuels add up over $380 billion over the next five years, according to the Green Scissors report. Historically, fossil fuels receive annually about 13 times more than incentives going to all renewables, according to a recent report by DBL Investors.