Energy-Geek: Silicon, Solar Power Manufacturing: China Continues to Play by Its Personal Guidelines, Threatening All Comers

Wednesday, February 29, 2012

Silicon, Solar Power Manufacturing: China Continues to Play by Its Personal Guidelines, Threatening All Comers

Graphic courtesy Washington Post

Considerably has been talked and written about competition when it comes to manufacturing and international trade in solar photovoltaic (PV) products and technologies in the wake of CASM’s filing of dumping and countervailing duty petitions with the Dept. of Commerce and Worldwide Trade Commission. Talking about the competitiveness, or lack thereof, of manufacturing solar PV in the US isn’t anyplace near central to the real problem, however. This becomes apparent when examining the vastly different, basic nature and construction of the Chinese and US economies.

Talking about relative competitiveness of manufacturing in China versus the US is valid adequate in concept, but in fact the US and China are taking part in entirely distinct ball video games, or much more accurately, taking part in the very same ball game according to wildly diverse guidelines. Nowhere can this basic clash of financial methods and government policies probably be observed a lot more obviously than in the solar PV business policies and goals set out in China’s most recent, just lately announced Five-Year Plan.

China’s 12th Five-Year Program: A Clear, Present Threat to Foreign Competitors

As element of China’s 12th 5-Year Strategy, the Ministry of Industry and Information Technological innovation announced the admirable and welcome goal of reducing the expense of solar energy to .8 yuan (12 US cents) per kilowatt-hour (kWh) by 2015 and .six yuan (9 cents) by 2020.

The 12th Five-Year Program also calls for Chinese makers to significantly enhance production of solar PV panels in order to reach 5 gigawatts (5 GW) by 2015, while polysilicon producers will improve their yearly production capacity to 50,000 tons.

These market place directives come in the wake of solar PV panel prices crashing in the previous two many years. Leading solar PV organizations close to the planet are posting losses, whilst much less-effectively-established organizations are going bankrupt. Uncalled for and unsustainable growth in solar PV panel and polysilicon production by Chinese producers have been the main culprits.

Ironically, the extraordinary drop in solar PV and polysilicon prices largely prompted by growing Chinese production is major governments in the countries that have led growth in solar energy to lower back and minimize, if not get rid of or shelve, subsidies and other incentives — killing the goose that lays the golden eggs, so to speak.

Flaunting Worldwide Trade Guidelines

Is China’s latest 5-Year Plan the response of an open market place-driven economy driven by provide and demand? Plainly not. It’s the response of a centralized command-and-manage financial system that is fundamentally the polar opposite of these in the US and other main marketplace-driven economies close to the globe. To pretend otherwise dangers long term economic development and effectively-being of citizens in the US, EU and all other Chinese trade partners.

Regardless of marketplace provide and demand situations, the Chinese government is intent on continual expansion of “private sector” solar power organizations across the provide chain. Could the following ever take place in the US, EU or other nations based mostly on a private sector, market place-driven economy?

“The government will also help businesses in the solar sector improve yearly product sales. It aims to have at least one particular organization reaching one hundred billion yuan in revenue by 2015, and between 3 and 5 companies reaching 50 billion yuan by the identical date,” according to People’s Daily On-line’s report.

Not only that, but in spite of announced plans to aggressively ramp up domestic solar PV installations, well over 90% of China’s solar PV cells and panels are exported. Tilting the scales even further in favor of domestic organizations, 󈭀% of solar gear and auxiliary supplies” are to be developed domestically. Hence, the solar power objectives spelled out in China’s most recent Five-Year Strategy only raise the stakes and increases the strain on rivals in other WTO member countries.

Subsidizing industries to increase exports to the detriment and harm of business and corporations in other WTO member nations is exclusively prohibited according to WTO guidelines. So is dumping of products at fees below domestic production. Looking for to enforce these international trade rules to assure something like a degree playing area is what CASM’s trade petitions are all about.

As a result far, China’s industrial improvement and trade policies have targeted on knocking out foreign competition in silicon solar PV. The newest Five-Year Program expands that and puts thin-film solar PV producers below threat. “The program will bring opportunities for thin-film PV panels,” Individuals’s Daily quoted a unnamed source at Hanergy Holdings Group Co Ltd, a producer of thin-film PV panels.

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