Trade Dispute Poses Dangers for Residential Solar?


You may have heard or read about the trade dispute brought before the US Department of Commerce between Solar World and Chinese panel manufacturers. The investigation aims to discover whether Chinese panel makers illegally “dumped” solar components into the global market with the assistance of generous subsidies. The Coalition for Affordable Solar Energy (CASE), a group of solar manufacturing and installation companies, strongly opposes any trade sanctions against China, arguing that such policies reek of protectionism.

So why is this relevant to a prospective residential solar system owner? Several companies, particularly those providing solar leases (Sungevity, SunRun, Solar City, and SunPower) offer packages that rely on Chinese panel pricing. One reason these companies can provide a lease with $0-$2,000 down payment is because while the cost of a system is prohibitively high for many homeowners, it is affordable enough to attract equity investors that ultimately pay for buying and installing the panels. If these panels were more expensive, the only solution to cover the added costs would be to increase the monthly payments owed under the leasing contract or charge more upfront (defeating the purpose of a lease).

But leasing companies aren’t the only ones that stand to lose business and jobs if global panel production is blocked from the US market. Over 40 other companies spanning from California to North Carolina to New Jersey have joined CASE to oppose trade sanctions.

Whether or not there was foul play from Chinese manufacturers is not as concerning as the ripple effect a successful ruling could have on solar installations. Despite record growth in the last two years, solar industries and technologies are still approaching market maturity, in which more efficient supply chains and higher demand drive prices to a more affordable level. With federal and state incentives currently helping to drive demand, many companies, CASE members and others, are competing to offer affordable options for residential customers. Several businesses using Chinese components simply would not be able to operate with a strained or broken supply chain. Remaining competitors likely source their system components from more expensive components that have yet to achieve the efficiencies of their Chinese counterparts, thus possibly increasing the cost of going solar. Then the only way to keep solar as affordable as it is today would be to raise government and utility incentives, which, as you know, are becoming more and more difficult to sustain, much less increase.

We all want to buy American and protect companies that create solar jobs here. But remember that not all jobs are on the front end of the supply chain, and that the global market for solar plays a large role in reducing the costs of your solar system.

Leave a Comment