How can the U.S. play a bigger role in the global solar manufacturing sector?
Proponents of corrective trade action draw a link between U.S. solar manufacturers' recent struggles and China's dominance. The ongoing investigation by the U.S. Department of Commerce (DOC) and International Trade Commission into whether Chinese solar modules have benefited from unfair government assistance and flooded the market has put a harsh spotlight on China.
However, even though the DOC recently issued a preliminary ruling that imposes tariffs on Chinese modules, clamping down on Chinese imports may not be the key to growing the U.S.' own solar manufacturing market, according to Jamie Girard, senior public policy manager for North America at SEMI.
‘Penalizing the Chinese may simply allow other non-U.S. manufacturers to gain market share in the U.S.,’ Girard tells Solar Industry. ‘There is no guarantee that increased duties on the Chinese will directly help the U.S. players, especially if demand in the U.S. is lower than previously forecast.’
‘One thing is certain – we live in a world where global trade is the norm,’ Girard adds.
SEMI has officially maintained a neutral position on the trade case. In a recent report on PV manufacturing in the U.S., the trade group recommends a series of other, non-China-related strategies that the U.S. government adopt in order to help PV manufacturers compete globally.
Failing to enact these policies and create a larger U.S. PV manufacturing base could represent a major missed opportunity.
‘While the majority of jobs related to the solar industry have been in the sales and installation of solar products, the full value of manufacturing employment should not be underestimated,’ SEMI writes in the report. Manufacturing jobs have a higher multiplier effect on the economy than any other type of job.
Unfortunately, despite the U.S.' leading position in early-stage PV innovation and venture capital, the country's presence trails off once companies reach the commercial-scale manufacturing stage.
SEMI's recommendations for correcting this trend center on both federal- and state-level policies that would support the U.S.' clean-energy manufacturing base, as well as spur domestic product demand that would, in turn, stimulate in-market manufacturing.
‘The fact is that the U.S. has not kept pace with the policy requirements necessary to sustain and grow the demand side of the market,’ Girard says.Â
On the federal level, specific policies the group recommends include the ever-elusive national renewable energy standard, which has been proposed several times in Congress but has yet to be implemented. A clean energy standard (CES) made its most recent appearance on the Senate floor this month, when Sen. Jeff Bingaman, D-N.M., unveiled the Clean Energy Standard Act of 2012.
‘If Congress were to consider a broader [CES] to include nuclear, natural gas and 'clean coal,' the SEMI PV Group strongly asks that solar technologies be afforded a carve-out,’ the group notes. SEMI says a carve-out would ensure that solar technology is treated ‘fairly’ in the context of a wide range of energy technologies with varying environmental profiles.
SEMI also calls for maintenance of the vital investment tax credit through 2016, as well as an extension of the U.S. Department of the Treasury's Section 1603 cash-grant program. Many solar firms across the supply chain have, likewise, long described both of these provisions as vital.
Other familiar policy essentials recommended in the report include continued funding for the U.S. Department of Energy's solar research and development (R&D) programs, and a permanent tax credit for private R&D.
Another idea proposed by SEMI is a new financing entity called the Green Bank.
‘The Green Bank would be a publicly owned bank, started with federal government seed money, designed to provide low-interest financing to businesses to invest in clean energy technologies,’ the report explains. ‘By working closely with private banks to provide loans, credit enhancements and other financing tools, the Green Bank would stimulate private-sector lending and investment for projects that are currently unable to access conventional financing on the size and scale needed.’
SEMI's report does not target a particular type of solar product manufacturing. In recent years, the rise of Arizona-based thin-film manufacturer First Solar has been followed by the emergence of several thin-film start-ups in the U.S., such as Stion, Abound Solar and MiaSole.
Although most of these manufacturers have yet to produce modules at high volumes, some industry executives have pinpointed thin film as the U.S. solar manufacturing sector's best hope, as crystalline PV manufacturers are shutting down or moving production overseas.
Girard says that in order to support both emerging and established thin-film players, SEMI has created a thin-film PV special interest group.
‘There are many challenges ahead – and an ever-present need to drive down cost and improve efficiency – in order to make thin-film PV competitive with crystalline, but the promise is there,’ he says.
SEMI's full report – ‘Manufacturing Solar Photovoltaic Products in the U.S.’ – is available for download here.
Photo credit: First Solar
