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Quick Take: It seems that we may have two trends working together to make it harder for renewables to reach grid parity. First, renewables are getting more expensive (or, at best, hitting a plateau). This is because tax incentives are lapsing for both wind and solar. And because threatened tariffs will make Chinese solar panels and Chinese wind components more expensive.

 

Second, natural gas is getting cheaper thanks to the fracking technology that has unleashed immense new supplies. We've always believed that smart grid would grow in part because of the need to integrate renewables. Now it appears renewables may grow more slowly than originally expected, which begs the question: Are we shooting ourselves in the foot as far as our renewables efforts are concerned or will tariffs do more good than harm? Use the Talk Back form below to let us know how you see it.  - - Jesse Berst

 

By Doug Peeples

SGN News Editor

 

The U.S. Commerce Department announced in mid-May that new tariffs on Chinese solar cells and modules will be a lot higher than originally expected – with a rate of about 30% or more – to protect U.S. industry from "allegedly subsidized" components being sold in the country at lower than fair market value.

 

While it's a preliminary ruling based on earlier findings from the U.S. Trade Commission (a final ruling is expected later this year), China has threatened to respond with counter-tariffs on American makers of related products, according to Scientific American.

 

Market intelligence company IHS said in a press release this week that Chinese solar exports to the U.S. could drop by about 50% this year as a result of the tariffs.

 

The Commerce announcement immediately split the U.S. solar industry into two very different camps: those that think tariffs are a great idea and those that don't. Tariff proponents said China is artificially driving prices down and choking production, while opponents said most solar jobs in the U.S. are in areas like sales and installation and that the industry benefits from the bargain-priced Chinese panels, said a CNN Money news story. The story also said opponents are afraid the tariffs will hamper solar's ability to compete with fossil fuel power generation.

Second verse, same as the first – only substitute wind for solar

On Wednesday, Commerce also set preliminary tariffs of 26% on specific Chinese wind tower producers, with lesser rates for others. Vietnam producers also were tagged with tariffs after the Wind Tower Trade Coalition complained that the cheap imports from the two countries were driving them out of business. With wind, the issues are a little different. For example, shipping the towers to wind farms is expensive enough that Chinese and Vietnamese towers aren't going to compete well in areas that don't have ready access to sea ports. And local markets typically supply towers to wind farms in the Great Plains, the country's most prolific wind producing area. They aren't expected to feel much of a pinch.

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energy

Why aren't oil imports under a similar "dumping, cheaper than domestic production" tariff?

Gladwyn d'Souza - 06/01/2012 - 07:39

Renewables Plateau

Jesse,I would find it hard to believe that the long history of 3% per year electricity cost increases will plateau. The impact of conservation and efficiency increases is going to certainly plateu the amount of electic power consumed, but that will only cause higher rates as the electric utilities basically have not and likely will not in the foreseeable future change their business model from a basic business of selling energy. They certainly don't seem to be doing anything to reduce their overhead costs. So if the 3% per year energy cost increases continue, the cost of solar energy on its way down will intersect the cost of utility power on its way up. Tariffs on the Chinese solar panels may move the intersection out a few years, but will not prevent it. Likewise, I do not expect the low cost of natural gas to be passed on to utility electricity consumers, it will simply produce higher utility profits and be absorbed by their inefficiencies.

Bruce Hamilton - 06/01/2012 - 07:50

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