U.S. Imposes Trade Tariff on Chinese Manufactured Solar Panels

by Jarrah Harburn on April 2, 2012

Chinese solar panelsThe U.S. Government announced this week that it will begin adding a tariff to Chinese solar manufacturers trading to the U.S. market. The Obama administration has offered moderate support to the home-grown renewable industry, feeling that this development will help U.S. based companies to survive in the competitive industry. This article will look at how these changes may affect the U.S. market, whether the UK industry can expect anything similar and why.

If there has been resounding improvement in the state of solar components over the last 12 months in the UK it has been in the reduction in cost price. Where once panels and inverters trickled into the country from a limited number of manufacturers and at prices hardly competitive comparative with other European markets; there now exists rampant competition and far better prices. Distributors and manufacturers alike have seen prices drop so markedly that the end price for even domestic solar installations has dropped thousands of pounds.

How China Dominate the PV Manufacturing World

China is the world’s leader in solar component manufacturing. There are more top ten manufacturers with their base of operations in China than any other country. The incredibly competitive margins that are possible from the country’s photovoltaic industry come about through their unique government lending process. The Chinese State Bank offers substantial loans to solar pv manufacturers at incredibly low interest rates that essentially allow companies to borrow the finance needed for free. On the back of the huge capital backing, the companies work on a huge economy of scale and can flood a countries market with products. What’s more, the products stand up to the strictest international standards and cannot be deemed inferior in quality or reliability.

This has led manufacturers based in other countries to believe the advantage unfair, and that something needs to be done to even up the market in their respective countries. In the U.S. this resulted in the recent imposing of a tariff on Chinese manufactured solar components coming into the country. The tariff of 2.9% to 4.73% increases the cost of Chinese components to distributors, installers and investors and makes domestically produced panels and inverters more viable.

Could it happen in the UK?

The short answer is no. There are no major manufacturing bases set up in the UK, unlike the U.S. This means there is no incentive for the government to introduce such a tariff and promote domestically produced solar panels. Until such a time comes about the UK market will continue to import solar panels from China and Europe for it’s requirements. It is hard to predict whether solar component manufacturing will ever take off in the UK but such an event is unlikely. We can import all the products we need at increasingly competitive rates from other countries without the pollution or complication required to establish our own.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: 020 7205 2267

© 2012 Solar Selections Ltd

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