As you pat yourself on the back for “going green” by installing solar panels purchased from a local company, you may have unknowingly boosted the Chinese economy as well. Most people are unaware that a solar trade war is being waged right inside our country due, in part, to an avalanche of of inexpensive imported panels from China and the ongoing push by environmental groups to abandon virtually everything associated with oil and gas energy.

But there’s a slight glitch; the U.S. solar industry is equally split over these imports with U.S. manufacturers of the panels insisting their sales are being diminished and are demanding a special tariff placed on the imports. However, another segment of the U.S. solar energy industry supports the import of less expensive panels are actually helping to fuel solar sales across the country.

U.S. based solar panel manufacturers are now offering a new patriotic sales pitch something on the order of “True green is also red, white and blue.” While this sounds good in theory, it isn’t resonating with consumers who must also consider their bottom line, and that means if the products perform comparably well, then the nod goes to the lowest cost option, and the U.S. manufactured panel are much higher priced than the ones coming from China. When boiled down to the ultimate reason for the price differentiation, its once again a union-driven phenomenon of higher wages being passed on to the consumer.

U.S. solar panel manufacturers also insist that the Chinese are breaking trade laws using a practice called “dumping” whereby they subsidize a customer/company that ultimately opens the door for selling a huge quantity at a discounted price rather than trickling in the products at a higher price. So far the U.S. Department of Commerce and the International Trade Commission hasn’t been able to determine any wrong doing on the part of the Chinese, they’re simply following U.S. laws to the letter.

Interestingly, an owner of one of the largest solar panel manufacturing companies in the U.S. openly admits that adding tariffs to Chinese solar panel imports would result in higher prices for American consumers, but the equalization of pricing makes the industry a much more fair place overall. It’s unlikely that most U.S. consumers look much beyond the bottom line price when shopping for comparable products whether they’re solar panels or any other mass produced commodity.

Another significant factor is that the majority of solar-related businesses in the U.S. are solely involved in installation of the panel, not the actual retail sale of them. So adding a tariff to Chinese solar panel would indirectly undermine the profitability, and potentially the sustainability, of these businesses and could ultimately put them out of business when consumers reach a financial tipping point of postponing the addition of solar panels. This aspect play directly into the shortage of jobs in the country, and shuttering solar panel installation businesses that are finally gaining some traction seems counter-productive at this time when millions of Americans remain out of work. In addition, such a move to hike tariffs could spark a trade war with China, and that’s surely a no-win issue, especially for the U.S.

The bottom line, as with most buying decisions, is the price of the product, not the country of origin. If a solar panel from the U.S. and China perform equally well, then a consumer is most likely to buy the one that has the lowest cost. We do it every time we go grocery shopping or searching for something online. Like it or not, it’s all about the money, and when we can buy a comparable product for less that means we have more money left over for buying something else. And when that “something else” is sold by an American company it tracks back to actual jobs versus unemployment.

This entry was posted on Saturday, January 21st, 2012 at 10:39 am and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.