Federal research lab reports China's costs for solar manufacturing exceed those of U.S. producers

February 8, 2012

A revised research presentation from the National Renewable Energy Laboratory has concluded that Chinese production of crystalline silicon solar technology for the U.S. market costs more than American production for the domestic market.

According to a release from The Coalition for American Solar Manufacturing (CASM), a group of seven U.S. solar manufacturers that represents more than 150 employers of more than 14,650 workers, Chinese producers have an inherent cost advantage of less than 1 percent compared with U.S. producers.

However, when shipping costs are accounted for, Chinese producers face a 5 percent cost disadvantage, according to the report.

"This analysis from the renewable-energy research arm of the U.S. government corroborates our view that an export drive sponsored by the Chinese government is improperly intervening in the U.S. market," Gordon Brinser, president of SolarWorld Industries America Inc., said in the release. "Highly efficient U.S. producers like SolarWorld can vie with any company in the world in legal competition."

The wages for American workers are also higher – and rising on an annual basis, according to the report, showing that sustainability of the sector in the U.S. may be better than expected.

The Financial Post reported that Washington is considering punitive import duties to help U.S. manufacturers compete with the Chinese in the solar sector, and there are several key industries that the American companies already hold an advantage in.

According to the news outlet, several U.S. companies have high-performance machines, for wind turbines and solar panels, that are able to cope with brutal offshore conditions, unlike those manufactured in China and India.

The Financial Post reported that the U.S. is still leading in one of the most important aspects of solar manufacturing: innovation. The Asian market has been unable to match the Americans in this facet of production, and increased investment by the U.S. government and private sector could continue this trend.

Clean Energy Authority reported that proposed tariffs against the Chinese could lead companies to look more favorably at U.S. solar panel manufacturers, as the Asian market may be hurt by these protective measures. This, coupled with the increase in shipping costs, may benefit the American market.