Solar Tariffs Reveal a Complex Dynamic Between Chinese and U.S. Providers

Last Wednesday, the United States International Trade Commission upheld tariffs on Chinese solar panel imports. These duties range from 24% all the way up to 36%.

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Advocates of the tariffs ballyhooed the ruling, suggesting that it will help to thwart Chinese companies who have been dumping ultra-low-cost solar cells on the U.S. market. But other analysts worry that the tariffs could harm the domestic market by making it more difficult for U.S. companies to export their solar products. Consider: according to a study done by GTM Research, in 2010, U.S. companies exported over $0.5 billion worth of solar components and goods to China: nearly a quarter of the U.S.’s solar global export market.

Some analysts say that Chinese solar manufacturers are already finding ways to get around the duties by assembling solar components in places like Taiwan. Many Chinese solar companies can also afford to operate at a loss, since their business models allow them to cover interest payments and variable costs – essentially to play a waiting game.

As a consumer – or a potential consumer – of solar energy for your Bay Area home or business, you may wonder what this arcane industry maneuvering might mean for you.

The bottom line is this. The Chinese/U.S. solar industry dance is in some ways a response to an imbalance between consumer demand and production capacity. The global production capacity of solar components is approaching 70 gigawatts. Global demand, meanwhile, is less than half of that: it’s just 30 gigawatts. There is way more supply than demand, so the market is convulsing, broadly speaking, to try to find an equillibrium.

As a consumer, fortunately, you don’t need to worry. If solar continues to make inroads against other energy technologies, your investment in panels and cells will make your property more valuable. Likewise, as more companies get into the industry, you can expect innovations and dynamic applications of solar technology, which will also redound to good effect for you.

The team here at Save A Lot Solar can help you find a cost-effective and efficient solution for your Bay Area home or business’s needs.

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