Until Recently, Few Knew About the U.S. Solar Import Tariff

By Ucilia Wang

The United States has a rule in place to impose a 2.5 percent tariff on imported solar panels. Except, few knew about it until recent weeks.

The U.S. customs decided in January this year that the tariff exists, after an American Subsidiary of a Spanish company asked about it, reported the New York Times.

But that decision apparently didn't become widely known even though the customs service posted it on its website. When it became more widely known in recent weeks, bigwigs in the solar industry tried to keep it mum while meeting to figure out what to do, the Times reported.

One legal strategy is to challenge the custom officials' decision to classify solar panels as electrical generators. They issued the decision after determining that solar panels have become more complex electronic equipment.

The tariff could cost importers about $70 million if they have to pay a double fine for failing to pay the money since January this year, according to the Solar Energy Industries Association.

The tariff would have the biggest impact on importers of Chinese solar panels, and those importers would include the American subsidiaries of Chinese solar panel makers such as Suntech Power (STP).

China, along with Taiwan, accounted for about 28 percent of the world's solar panel production capacity in 2008, according to GTM Research. Europe had 30 percent while Japan had 17 percent. The United States took up 7 percent.

Europe remains the largest market for Chinese companies, though the United States is the new frontier to conquer.

Suntech, China's largest solar panel maker, saw its sales in the United States from 3.4 percent of its revenue in 2006 to 7.4 percent in 2008, according to its filing with the U.S. Securities and Exchange Commission. Europe's share was 77.7 percent in 2008.

Comments

[Mad Hedge F...:]

utn I spent the evening speaking to Gao Jie, a Beijing civil judge who left the bench to join China’s growing environmental movement when her kids came home from school one day coughing and wheezing. You only have to inhale in the capitol city these days to understand that they have a huge problem there. One of the dirty little secrets of international trade for the last three decades has been the offshoring of high polluting industries from the US and Europe to China, which then vociferously complain about the emerging country’s toxic environment. “Cancer villages” are now proliferating throughout the landscape. China gets 80% of its power from coal, compared to only 50% in the US. As a result, scientists figure that China became the world’s largest emitter of CO2 in 2006. The central government is now asking the provinces to achieve both GDP and energy conservation goals. Government policy dictates that air conditioners only kick in at 79 degrees. It is also pushing headlong into alternative energy, with an eye to exporting low cost platforms to the US. It is no accident that two of the most competitive solar companies in the world, Suntech (STP) and Yingli Green Energy Holding (YGE), are Chinese (click here for my piece on the Chinese solar wars). China is also negotiating to have Phoenix based First Solar (FSLR) build the world’s largest thin film solar power plant in Western China, which, it turns out, looks a lot like Arizona. The mammoth, 25 square mile facility will supply power to three million homes. China’s problems give one an inkling of how we might have ended up if we hadn’t passed the Environmental Protection Act. I first visited China during the Cultural Revolution, when they doused piles of bodies of those who died in the famine with kerosene and burned them, and anyone educated had to endure being paraded down a street in a dunce cap. I had to pinch myself after seeing a sophisticated and well educated woman like Gao Jie openly pursue her liberal goals, unfettered by a totalitarian regime.

Oct 01 10:29 AM

[nakedjaybird:]

China, if it is able and smart enough reverse the trend, will not permit the same mistakes in energy and industrial poluition by using the obsolete technologies the US (and the world) has used for years and wants to sell them (so China can then try to work it's way out from under that just as the rest of the world is doing today). They need to put in place the smart stuff today, first time, rather than replace the other stuff next time (yes I know they are already in trouble, but such a short distance down the path they are going to go - now's the time for the shift). They are still close enough to the starting line to delay, pause, MAKE REAL INVESTMENT AND INNOVATIVE ADVANCES NOW!!! SHOW THE WORLD!!!!!!.

Oct 02 12:15 PM

[TinyTim:]

Nakedjaybird-
China is still a totalitarian regime.
Despite what you may have heard about communism emphasizing fairness for the people (collective), the people (individual) are disposable.
They have a large enough internal market to be able to make some strategic economic decisions on things like standards for cell phones and computer operating systems and thereby avoid high prices by creating their own markets.

When it comes to the environment and things over which they have no control, like energy supply, decisions are based on cost, not benefit.

Oct 02 04:52 PM