The American Solar Manufacturing Industry is far from “Coddled”

- Mark Widmar


The issue of tariffs on Chinese solar panel imports, the focus of yesterday’s Washington Post editorial, boils down to one simple point: China’s solar industry has been lavished with billions in government subsidies, creating a significant and unlawful advantage for them at the expense of the U.S. solar industry. Far from being “coddled,” the American solar manufacturing industry, since its inception, has not had the benefit of government backing. 

Photovoltaic solar technology was invented in the U.S., China’s dominance results from excessive government intervention with a clear intent on dominating and monopolizing an industry of global importance. What China’s apologists in the U.S. solar industry portray as competitiveness is nothing but illegal subsidies in the service of geopolitical influence. China’s actions in subsidizing its solar industry violate the World Trade Organization’s rules on subsidies and fair trade, and the Section 201 safeguard tariffs are a consequence of that. 

In sharp contrast, the U.S. solar manufacturing industry’s best shot at a long-term solar industrial policy is the provisions contained in Senator Ossoff’s Solar Energy Manufacturing for America Act, which was subsequently rolled into the Build Back Better Framework. Unfortunately, as we wait on the legislative course to play out, we currently do not have any government incentives in place for domestic manufacturing.

First Solar was one of the founders of the U.S. solar industry in the 1990s. Today, we are the only surviving domestic manufacturer that began the journey; China’s actions decimated the rest of the industry. First Solar has survived due to heavy investments in R&D, the differentiated nature of our technology, and our balanced approach to growth. We are not here due to being “coddled” by the US government.     

To imply that the American solar manufacturing industry is coddled is insulting to the thousands of Americans that work in solar manufacturing and the diverse industries, from glassmakers in Ohio to sand miners in Michigan, that make up its ecosystem. 

The Post argued that the tariffs have “made these products more expensive than they need to be.” It is important to note that it is now cheaper to build solar power plants with fixed electricity costs over the 40-year lifespan of a plant than it is to add any other type of generation in many parts of the U.S.

More importantly, it is illogical to compare solar panel prices in the U.S. to a market that allows China to dump cheap products unchallenged. 

What’s more is that solar panels account for less than 20 percent of the levelized cost of electricity of an average utility-scale solar project, an insignificant number in the broader scheme of things. In real terms, a comprehensive, 15% tariff on imported solar panels would increase a $30 per megawatt-hour power purchase agreement to $31. Over 40 years, an additional dollar per megawatt-hour is nearly insignificant and in no way justifies decimating a critical domestic industry. 

And finally, the Section 201 tariffs have not stopped the dumping of subsidized Chinese panels since bifacial panels were excluded from tariffs in June 2019. In fact, the National Renewable Energy Laboratory’s Solar Industry Update reported that in 2020 “most” of the 14.7GW of crystalline silicon solar panels imported into the U.S. and not subject to tariffs “were likely bifacial” panels. If accurate, that is a number substantially greater than America’s entire domestic solar manufacturing capacity.  

Fundamentally, this is a question of our country’s energy security. Drawing a parallel with federal regulation of foreign investment in the electricity sector, one could argue that removing the Committee on Foreign Investment in the United States (CFIUS) would allow access to cheap financing from China, reducing electricity prices. Yet that is not something we allow because of its security implications. So why should we allow ourselves to become entirely dependent on an adversarial nation for the irrational cheap solar technology that generates that electricity?    

Finally, we agree with the need to rapidly deploy as much solar as possible, it may well be worth factoring in the high carbon cost of manufacturing a solar panel in China with coal power. We all live on the same planet, and whether emissions are produced in Xinjiang or California, they contribute to the global climate crisis. Just because the smokestacks are not visible from K Street does not make them any less harmful to our planet.

Mark Widmar is the CEO of First Solar    

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