U.S. Imposition of Steep Tariffs on Chinese Solar Panels – Protecting or Hurting American Markets and Consumers?

U.S. Imposition of Steep Tariffs on Chinese Solar Panels – Protecting or Hurting American Markets and Consumers?

On Tuesday, December 16th 2014 the United States Department of Commerce approved a collection of trade tariffs on solar panels imported from China and Taiwan. Tariffs on these solar panels, ranging from 18.56% to 35.21%, have been in place since earlier this year when the Commerce Department issues a preliminary decision. The case was brought by SolarWorld Industries America, Inc. the U.S. subsidiary of German company SolarWorld AG. SolarWorld alleged that Chinese companies were selling solar panels in the U.S. market below manufacturing cost, a practice known as “dumping”, with the intent being to cause harm to domestic manufactures of similar products.

This particular case dates back to 2012 when SolarWorld first successfully petitioned to impose solar panel import tariffs. Chinese manufactures of solar panels then started using solar cells, the central component of the technology used to harvest the sun’s energy and convert it into electricity, made in Taiwan as a means to circumvent the restrictions. This led SolarWorld to again ask the Department of Commerce to expand the tariffs to include Taiwanese manufactured panels. The proposal will next go to the U.S. International Trade Commission for review, and if approved, keep the assessed duties in place for at least five years.

A SolarWorld spokesperson has declared this action as a major victory that has “paved the way for expansion of solar manufacturing” in the U.S. market. However, not everyone is cheering: opponents of the ruling cite trade tariffs as a major factor driving up the cost of home solar systems, slowing adoption and negatively impacting retailers and installers of such systems. Imports of Chinese-manufactured solar panels have dropped from more than 93 million units in pre-tariff 2011 to just over 47 million units in 2012, and further reduced to just shy of 33...