What Do Solar Panel Tariffs Mean For You?

The Commerce Department has found that China provided trade incentives on Chinese made solar panels for the US market, and that this was unfair to US solar panel manufacturers.  The Commerce Department is in turn charging a tariff on all Chinese imports of modules starting this summer.   Here are some answers to help understand the dispute and what it means for consumers.

Image courtesy Getty Images

What do ‘trade incentives’ mean?

The US Commerce Department, through a complaint filed by American solar manufacturer Solar World, charges that the Chinese government subsidized the solar panel market with massive loan incentives, cheaper power costs, and actual cash disbursements.  In the world of international trade, this is considered unfair as it obviously lowered the manufacturing cost for Chinese producers.

Doesn’t the US government give incentives to US solar manufacturers?

The US government over the last 6 years has helped domestic solar production with its own incentives.  But they are very different than what China offered its own manufacturers.  The Department of Energy offered loan guarantees and tax incentives, which essentially made the US government a cosigner on loan applications.  And while it while it may seem like splitting hairs, the Chinese government’s actions had a far greater impact on the actual price of the finished product.

How much are the tariffs?

The tariffs are scaled to punish the biggest violators.  There are as such:

• Suntech, 2.9 percent    
• Trina 4.73 percent 
• All others, 3.59 percent

But this is likely just the beginning of the tariffs.  The Commerce department is not finished with its review and this decision opens the door to more sanctions.  The US government will review the charges of ‘dumping’ (meaning the industry sold its panels at a loss) in May.  Industry insiders believe (and hope) that the final tariffs will be closer to 10%. 

How will this affect solar panel prices?

It is anticipated that prices will rise briefly, and then continue their long descent down.  Many suppliers have spoken of raising prices 10% in April 2012.  But the long term economics of solar won’t change drastically, as technology and manufacturing efficiencies continue to drive the price per watt down.  Consumers should not be fearful that the prices will continue to rise.

Why will prices rise now?

Many solar panel manufacturers are operating at or near a loss to compete with the Chinese manufacturers.  This rise in price will better reflect the actual economics of solar panel manufacturing and allow some companies to turn a profit and reinvest in research and development.  The US buys over $3 billion in solar modules from China every year, and more of this money could be directed toward American made products.

So overall is this a good or bad thing for solar?

Of course everything depends on your perspective, but overall this is likely a good development.  Obviously the US solar makers are cheering this decision, and anyone who is a fan of American manufacturing would do likewise.  In the long term, this will probably be just a bump in the road for solar panel prices and they will likely keep falling over the long term.

The outlook for solar power is still bright, and with global economic recovery on the way, that outlook will only get better.

Kriss Bergethon is a writer and solar professional from Colorado.  Visit his website at Solar Panels today.

Amazing Facts About Solar Panels

Amazing Things About Solar Panels That Could Change the World

Green energy is one of the most rapidly expanding industries in the world right now due to so many people looking to do their part to help save the planet. With so much focus on solving global warming and reducing air pollution, smarter and cleaner forms of energy are being looked at very closely by scientists and consumers. There are several cool facts about solar power that can change the world.

1. The Reduction in Prices for Solar Panels

One of the biggest reasons people avoided solar power in the past is that it was too expensive and inefficient to be worth their time. Coal has been up to 90% less expensive to use as an energy source over the years, which made other options ineffective. Prices on solar panels have dropped up to 30% in some cases and have come down to the $4/watt range.

2. The Development of Solar Film

Rather than using the traditional solar panels, a few companies have started to put out solar film. Film is cheaper to make than panels because it is printed out in rolls while standard panels are manufactured like microchips. The prices on solar film seem to be coming out at roughly $2/watt, which is 50% less expensive than panels.

3. Increase in Efficiency for Panels

Solar panels typically ran at an efficiency level of around 15%, which is measured by the difference between how much sun hits the panel and how much energy comes out of it. Solar energy has become more efficient in recent years, and newer panels are putting out 22% more consistently.

4. Increase in Efficiency for Films

Thin films have greatly increased in efficiency as well. Films consistently used to have about 10% efficiency, but with improvements in technology the films have bumped up their efficiency to about 15%, which makes them more worth the money.

5. Utility Scale Solar Power

Solar power can now be delivered through utility companies instead of just through panels mounted on a home or building. This enables power facilities to use mirrors and advanced panels to obtain maximum energy from the sun and transmit it to homes and businesses.

6. Increased Price for Traditional Power

As prices for traditional power like coal and fossil fuels continue to rise, people will continue to develop alternative energy sources. Solar energy is the most abundant resource that should be tapped, and increased cost will lead to more research and development.

7. Research for Advancements

Research drives projects like solar power to greater heights. When research is funded, things like efficiency go up for these panels and make it more affordable for everyone. The government is funding projects like solar power to clean up the environment.

8. Investment of Time and Money

Silicon Valley venture capital is involved in significant investments for the solar energy field. Programs are being granted the money and opportunities needed to advance solar power to a new level. Investment increases the rate of development for solar power.

Kriss Bergethon is a solar expert and writer from Colorado.  Visit his site at Solar Panels for more information.