Should Chinese Solar Subsidies to Be Applauded or Tariffed?

Sunday, July 22, 2012 8:06

As part of his recent attendance at the Forum for Chian-Africa Cooperation, United Nations Secretary-General Ban Ki-moon Applauded China’s Efforts To Achieve Sustainable Development, and his comments on China’s use of subsidies was unexpected.

“China has taken up this challenge as energetically as any other country in the world. It is already a leader in wind power. It is the world’s largest solar manufacturer. China is doing this through far-sighted use of incentives, subsidies, and regulations – through smart policy-making. […[ China keeps raising its sights – elevating its ambitions – recognizing the potential of renewable energy to create jobs, protect the environment, improve health and generate profits – these are win, win, win, win propositions”

Far-sighted use of incentives, subsidies, and regulations… WHAT?

Perhaps I missed something, but it was less than two months ago that the US Department of Commerce slammed China’s manufacturers with a 31% tariff for dumping their subsided panels in the US market.

Clearly DOC and Ban are not seeing China’s efforts in the same light.   Which leads me back to ask a simple question.

Are Chinese efforts to develop (some same dominate) solar and wind markets a bad thing if their investments result in more affordable deployments?

For me, this is one of the original issues I have always had with cleantech and anyone who is invested in the economy of cleantech.  That cleantech has moved from an industry that could clean up the environmental externalities of our current economy, to one where green jobs in a couple of factories take priority (for a few politicians).

Which leads me to a final thought.  As I have mentioned in other posts, I (like Ban) do applaud China’s decision to offer subsidies to those who are involved in the cleantech industry.  But that is because I believe that for many of these technologies to be deployed they need help when competing against traditional energy sources which receive massive subsidies around the world (incl the United States).

Which is occurring in China.

Where I believe Ban is stretching things a bit too far though is that he fails to recognize that China has yet to turn into a buyer itself, and thus is perhaps the core of the problem.  That, if China were deploying subsidized panels IN China, then the conditions would be different.  As would its defense of subsidies.

But as it stands, it is subsidizing panels for others.  A charitable policy, but with China’s urban per capita carbon footprint now ranking top in the world the time has come for China to make some serious investments.

According to one article is about to happen as the government raised its 2015 targets to 21GW:

With demand from Europe set to shrink from the second half of 2012, China’s domestic market will become increasingly important. China’s latest move will help to support the huge amount of production capacity added by China-based suppliers in the last two years by expanding domestic demand. IMS Research indicated that China’s c-Si solar module capacity reached 32.6GW in first-quarter 2012, while full year global installations are forecasted to reach just 30.6GW.

Which will not only make China one of the leading markets for solar energy generation, but the most important market for installations in a market that will not mind having a bunch of cheap subsidized panels available in the market.

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