Solar Tariffs Make Forecasts Cloudy for Some U.S. Companies

Photographer: Qilai Shen/Bloomberg

An employee assembles photovoltaic panels at Suntech Power Holdings Co.'s factory in Wuxi, Jiangsu Province, China, in 2011. Power Holdings, the world's biggest maker of silicon-based solar panels, expected a revival in demand in 2012. Close

An employee assembles photovoltaic panels at Suntech Power Holdings Co.'s factory in... Read More

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Photographer: Qilai Shen/Bloomberg

An employee assembles photovoltaic panels at Suntech Power Holdings Co.'s factory in Wuxi, Jiangsu Province, China, in 2011. Power Holdings, the world's biggest maker of silicon-based solar panels, expected a revival in demand in 2012.

(Cross-posted from Bloomberg.com's Political Capital blog.)

Keep an eye out tomorrow for an announcement from the Commerce Department, which is expected to slap tariffs on imports of some Chinese solar products.

SolarWorld Americas Inc., the Hillsboro, Oregon-based subsidiary of Germany’s SolarWorld AG, along with six other unnamed U.S. solar companies are hoping those tariffs will be big Big BIG! — as much as 250 percent of a solar panel import’s value. That’s what it will take, they say, to offset the unfair pricing of Chinese solar panels.

These companies can’t hoist the American flag all by themselves. A host of U.S. companies — suppliers who build parts for Chinese solar panels and the domestic resellers of those products — stand to lose business and revenue from any hefty tariff imposed by the U.S. against China.

Analysts Ken Monahan and Caitlin Webber, in a Bloomberg Government Study released yesterday, show that high duties may cause unintended consequences for various U.S. companies. They could actually reduce demand for polysilicon, the main input in the making of solar panels, hurting U.S. companies that exported as much as $2.6 billion of polysilicon in 2011, including about $700 million to China.

Duties may also reduce sales of U.S.-made solar inverters, which convert electricity generated by solar panels. U.S.-based manufacturers produced about 45 percent of solar inverters installed in the U.S. in 2010.

U.S. solar energy system developers and installers, which depend on Chinese solar panels that are about 13 percent cheaper than non-Chinese panels, also would have to decide whether to absorb the increased costs, pass them on to customers or find new suppliers.

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