It seems like boom times for U.S. solar. With demand skyrocketing, about $11 billion worth of solar power is set to be installed this year, and more than five times that amount is coming down the pike. Solar is employing 100,000 Americans, a number that rose by 7% last year even as overall employment barely grew at all.
But even as solar power thrives in the U.S., many think the business could be growing faster--and creating more American jobs--if it weren't for alleged foul play by China, the country's biggest solar rival. "The Chinese are eating our lunch," said Michigan Representative John Dingell, a Democrat, during a congressional hearing on renewable-energy funding. The feeling resonates with politicians who fear the U.S. is losing its edge because of unfair trade practices abroad, especially in China. In his State of the Union speech last month, President Obama vowed to take action "when our competitors don't play by the rules." But despite the ripe political climate for erecting trade barriers, the solar industry is split about the merits of protection.
The division is simple. If you're a customer buying solar panels or running a business that installs or services them, you're doing well. But if you make solar modules--especially in the U.S.--your balance sheet looks ugly. That's because solar power is getting much cheaper: prices for modules have dropped 40% over the past five years. "The good news for solar is that it's rapidly getting less expensive," says Kevin Lapidus, a senior vice president at the solar-services company SunEdison. "Eventually we'll sell solar the same way we sell anything."
But some U.S. manufacturers believe cheap imports from Chinese panelmakers, which receive billions of dollars in aid from Beijing, are causing the nosedive in solar prices. As a result, China now produces three-fifths of the world's solar panels--a proportion that is likely to increase. "Western manufacturers cannot survive this," says Ben Santarris, spokesman for the U.S. arm of SolarWorld, a major German panelmaker.
Last year, those concerns prompted SolarWorld, on behalf of seven solar manufacturers, to file a complaint of unfair trade practices by China. The Department of Commerce is investigating the case and is scheduled to make a decision by March 2. If Commerce and the U.S. International Trade Commission side with SolarWorld, the government could slap hefty tariffs on imported Chinese panels--as much as 50% to 100% of the modules' value. The Obama Administration has punted on the issue in the past, partly out of fear of igniting a trade war with Beijing, which has already threatened retaliatory action.