The U.S. Solar Industry Needs Government Support to Compete With Cheap Imports

U.S. solar component manufacturers need more government support and stricter enforcement of trade laws if America wants to create its own solar supply chain and cut dependence on cheap imports from China and Southeast Asia, a new report commissioned by the Solar Energy Manufacturers for America (SEMA) Coalition showed on Wednesday.

While demand for solar power in the United States is soaring, the industry relies too heavily on imported goods, with serious gaps for U.S. ingots, wafers, and cells, according to the report authored by Guidehouse Insights.

The analysis also showed that China’s dominance creates unnecessary risk for America’s climate and energy security goals, SEMA said.

China-headquartered companies now account for 99% of the world’s solar wafer and over 80% of the world’s polysilicon production, two core components that makeup over half the value of the solar panel, the report notes.

“It is critical to our energy security to break the current monopoly on needed components,” says the coalition, which recommends that policymakers set strong standards for getting bonus tax credits for using domestic content and federal procurement to incentivize investment in wafer and polysilicon production.

Strong enforcement of antidumping trade laws and laws against products suspected of being produced from forced labor should also be the focus of the Administration, the report’s policy recommendations say.

In procurement, “the U.S. government could lead by example and require all solar power producers with which it has power purchase agreements to use solar panels with the highest standards for U.S.-made components,” another recommendation reads.

“Solar manufacturers in America are operating well below their full potential because the government is facilitating an over-reliance on China and failing to provide a level playing field to help fuel investment and innovation,” said SEMA Coalition Executive Director Mike Carr.

“This report shows that if we actually want a clean energy future in this country, we will require a continuing whole-of-government effort that doesn’t allow our trading adversaries to derail the reshoring effort.”  

By Tsvetana Paraskova for Oilprice.com

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