It's no coincidence that the tariffs come after the Chinese stole dominance of the solar industry from the U.S.
China, it seems, did that in part by grabbing market share with the help of government-subsidized manufacturing. If that sounds familiar, it should. The U.S. has done much the same thing, only with far less profitable results.
Back in 2005, President George W. Bush enacted a solar investment tax credit to encourage consumers and businesses to embrace solar power. The credit has been renewed twice since then, including last year by the Obama administration.
Ironically, Chinese manufacturers were a big, if unintended, benefactor. Solar panel imports from China rose to almost $2.7 billion last year from $21 million in 2005.
As the market grew, prices for solar technology fell, benefiting not just consumers and businesses, but also U.S. companies that import Chinese panels and customize them. As many as 50 percent of the imported panels are used or installed by U.S. businesses. The tariffs may drive up the cost for Americans to switch to solar power, undermining the entire purpose of our solar subsidies.
Meanwhile, the Obama administration, as part of the economic stimulus, announced a loan guarantee program for U.S. companies that were developing new, and more expensive, technology.
So the tax credits drove demand for solar technology, even as the loan guarantees were encouraging companies to develop pricier products.
The result? Demand for the cheap panels from China soared, while buyers spurned the more expensive U.S.-made equipment.
In other words, China placed its bet on a product for which there was actual demand, while U.S. companies tried to up-sell customers on technology they didn't want.
Number of jobs created
As I wrote last year, the loan program was ill-conceived from the beginning. Born of the stimulus, its success was measured not in funding basic research, but by how many jobs it created.
It has paid out more than $8 billion to companies so far, but a recent report by the Department of Energy found that about a third of the recipients were on a "watch list" for violating the terms of the loans or other concerns, including financial viability, the Wall Street Journal reported.
The most famous of the program's recipients, of course, was Solyndra, which filed for bankruptcy last year after receiving more than $500 million in loan guarantees.
The Solyndra debacle is a reminder of the folly that fuels the administration's solar strategy. The government ignored the market conditions it helped create - conditions that kept Solyndra from competing and that private investors had already backed away from - blinded by the allure of jobs it might create.
Looking to renewable energy as a major job creator was wishful thinking. The industry is simply too small. Even gains that sound statistically large - 200 percent, 300 percent - don't represent that many jobs.
According to the Bureau of Labor Statistics, 3.1 million people worked in what could broadly be called green jobs in 2010. That's 2.4 percent of total employment nationwide for the same year, the bureau said. Its definition of green jobs, by the way, includes conservation, making weather stripping and collecting trash. The garbage man has gone green.
Getting smarter
Solar remains a promising and important technology. If the U.S. is going to diversify its energy dependence, it needs to develop sustainable solar power. But it won't happen if we don't get smarter about how we fund the transition.
We need policies that encourage solar use while encouraging a viable market in which U.S. companies can compete.
We can't trade long-term technological advancements for short-term job gains, and slapping import tariffs on Chinese panels won't hide the flameout of the administration's solar strategy.
SOURCE: http://www.chron.com/business/steffy/article/Steffy-Don-t-blame-China-for-Obama-s-solar-folly-3448990.php
No comments:
Post a Comment