Strategy on Imports of Solar Modules from China

Jeff Johnson has an article entitled, "Solar Panel Makers Cry Foul" in the October 31 issue of Chemical & Engineering News. A group of seven solar panel makers submitted a petition to the Department of Commerce alleging "dumping" of crystalline solar panels in the US by Chinese companies.

An attorney for the seven companies says, "the Chinese industries are using dump and subsidized pricing to drive US companies from the US market". Solyndra has been in the news as one of the bankrupt companies, and there has been a total of seven other US solar module producers who have gone bankrupt in the past 18 months.

There is no doubt that the US companies filed for bankruptcy, because they had been unable to sell their US manufactured products at prices as low as the Chinese. However, the kettle is calling the pot black.

The concern in the recent Solyndra scandal is that the US government had given Solyndra a half billion dollars in a loan guarantee. This is obviously subsidization at the US level. And, there have been others.

The question then is whether the Chinese are out-subsidizing their solar module manufacturers, as compared to US subsidizing of its manufacturers. The petition of the remaining seven US manufacturers has asked for custom duties against the Chinese products. This would certainly be better than a subsidizing war, which has already cost the American taxpayers dearly.

However, a better approach might be to allow these seven American companies to file for bankruptcy and have the Chinese continue to supply the market at reduced prices. This would give low-cost materials for US installations. If the Chinese later decide to raise prices, bankruptcy laws in the US are such that these companies could go back into production. And then we could give them a further advantage by belatedly applying custom duties to the Chinese imports, in retaliation for the then proven Chinese objective of using dumping to gain control of the US market.