The Commerce Department has decided to impose tariffs on solar panels imported from China after concluding that the Chinese government provided illegal export subsidies to manufacturers there.
The tariffs were smaller than many industry executives had expected - 2.9 to 4.73 percent - which could blunt their effect on sales. But the decision was nonetheless likely to be seen as a milestone because of its implications for international trade, renewable energy and American manufacturing.
With China and trade policy both critical issues in presidential campaign politics, the imposition of tariffs by the Obama administration seems certain to be used by the president's backers as evidence that he is getting tough with Beijing, while opponents might see an opportunity to criticize it as meddlesome industrial policy.
(The typical election rhetoric!)
But the decision was actually made by civil servants in a quasi-judicial process that is designed to be insulated from political pressures. The Commerce Department sent notification of the decision on Tuesday to a coalition of seven solar panel manufacturers that had sought the tariffs, according to SolarWorld, the company that led the coalition. The department, which planned to publicly announce the decision later in the day, declined to comment before then.
Whatever the political spin proponents or critics might want to put on it, there is no question that solar panels from China now dominate the American market, with a market share of about 50 percent; panel makers based in the United States represent 29 percent of the market. American imports of Chinese solar panels have soared from $21.3 million in 2005 to $1.15 billion in 2010 and $2.65 billion last year.
While American manufacturers oppose the imports, users of solar energy have benefited from low- cost solar panels from China. Globally, the Chinese panels have driven down the cost of solar energy by two-thirds in the last four years, narrowing but not eliminating the wide price gap that used to separate solar power from electricity generated by burning fossil fuels.
Plunging prices and widespread government subsidies for buyers of solar panels have produced a global boom in solar energy. But that boom has held few benefits for the American industry: the plunging prices led to the bankruptcy of three American solar panel manufacturers last August.
One of the failures was Solyndra, which cost the federal government roughly $500 million in loan guarantees. Solyndra's collapse has been the subject of a continuing investigation by Congressional Republicans, who contend that the Obama administration should not have lent so much money for an unproved clean energy program. In other words if it's not a fossil fuel the republicans want nothing to do with it...At least that's the message it sends me!