Wednesday, June 4, 2014

Just when you were thinking about going solar... (white board lesson)

The stocks of Chinese solar panel manufacturers took a hit today as the U.S. Department of Commerce caught up with their shenanigans for avoiding some pretty stiff import tariffs. Solar panels made by Chinese-owned enterprises operating in, and exporting from, Taiwan will now get taxed like they did when they were assembled in China. Of course the stocks of U.S. solar companies rallied big time.

Hey, sounds like a plan. I mean it's not fair when a country---through subsidies---helps its producers gain a competitive advantage, right? Yep, it's not fair. But not in the way you may be thinking. And it's not a plan you---U.S. consumer---should in any way celebrate.

Slate's Will Oremus tells why in today's column. Here's a snippet:
Congratulations, U.S. government: You’re now heavily taxing imported solar panels at the same time that you’re heavily subsidizing their purchase.

The losers include consumers, solar installers, U.S.-China relations, and humans who breathe air.
The losers in this battle include not only U.S. consumers, Chinese solar firms, U.S.-China relations, and humans who breathe air, but also U.S. solar panel installers like SolarCity and Sunrun, which employ far more Americans than the country’s relatively puny domestic solar-manufacturing industry. Oh, and whomever suffers if and when the Chinese government retaliates with tariffs of its own, as it did to U.S. polysilicon makers last year.

The list of winners is much shorter. There’s the aforementioned German firm, SolarWorld AG, and its U.S. subsidiary, along with a smattering of other domestic manufacturers who were having trouble competing with cheap Chinese panels.

And here's a 2 minute lesson I did two years ago on this very same topic:

1 comment:

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