We believe that the best way for America to get out of this
mess is by becoming the world’s leader in renewable energy, green products and
jobs. This agenda is mantra for President Obama and his platform.
Here’s a fly in that ointment, however, and it won’t surprise you where it
comes from – China.
It seems that the Chinese government is subsidizing its
leading producers of photovoltaic solar panels so they can sell here for less
than American-made panels. Chinese firms such as Suntech Power Holdings
are opening offices and production facilities on American soil to avoid
tariffs, similar to what the Japanese car companies did over the past 40 years
with great success. Journalist Keith Bradsher of The New York Times
unearthed plenty of examples of this plan in his recent article.
So, how do we reconcile this situation? How can we
stop the Chinese government from helping its solar industry lower prices?
Do we really want to? Ultimately, isn’t this good for American consumers
because it will make solar panels more affordable? Isn’t it good for the
environment because it will enable more homeowners to install solar
systems?
The answer is yes -- and no. As the costs of
photovoltaic panels come down, federal and local subsidies for homeowners
installing solar systems are being reduced. These reductions in tax
credits are increasingly more aggressive than the reduced cost of panels.
Thus the consumer will not be able to readily enjoy the money-saving benefits
offered by cheaper Chinese panels.
Furthermore, the technology and manufacturing source of
photovoltaic panels is not of great concern to many homeowners. They hire
a local electrical or solar contractor to design and install their home solar
system. They evaluate the total cost of the system, including tax breaks,
on a net-net basis. Thus the customer for the cheaper Chinese panels is
really the electrical and solar contractors. They will probably be more
than happy to buy the Chinese products if it enables them to make better
margins, while still offering a competitively priced system to their homeowner
customers.
I see one way to solve this while encouraging Americans to
use American-made photovoltaic panels for their home systems: let’s see
more stimulus money trickle down to help our own solar producers compete with
the Chinese. If that means more subsidies so be it. Or, how about
giving consumers additional tax breaks or a feed-in tariff system for
specifying to their contractors that they want American-made panels?
I am not in favor of protectionism, and I do generally
support free markets. However, these are not ordinary times, and it is
mission critical that America be the worldwide leader in renewable energy and
green jobs. If a relatively small portion of that stimulus package money
is needed to make this a reality, so be it. The United States has a
grandstand opportunity to renew its global leadership role through green
technology. Thomas Friedman reminds us of the unique opportunity that
lies before the U.S. in the following video.
Now it is up to us to act. If this isn’t
motivational enough, picture the contrary, 20 years down the road, our economy
is hanging in balance as we trail China in global manufacturing and now
renewable energy -- it isn’t pretty, is it?
Contact your U.S. Congressman as well as local legislators
to let them know your feelings.