Solar Panel Costs Drop, Are Cheap Imports to Blame?

Solar Panel Costs Drop, Are Cheap Imports to Blame?
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When it comes to producing mass electronics for less cost, countries like China have usually been able to over-produce the demand. Cheaper counterparts to name brand items can be sold at a fraction of the cost, but they usually are of less quality. Now that China is in the market for producing solar panels, the European Union blames Chinese imports for decreasing the cost of solar panels to the point of putting other EU manufacturers out of business. Are these concerns a strong basis for the EU's new duty taxes imposed on imported solar panels?

1. Solar Subsidies - Most governments of sovereign nations offer subsidies and tax-breaks to manufacturers and residents that invest in renewable energy. Although this is fuel to wean humankind off of archaic methods of power generation, can these subsidies be used as means to drive your competition out of business? One of the complaints that the EU has on the import of Chinese developed solar panels is the assistance of these subsidies from the Chinese government driving the cost so low that European manufacturers simply can't compete.

2. Rich Market - The European Union is one of the world's largest implementers for photovoltaic energy production, according to the Wall Street Journal. It stands to reason that any solar panel manufacturer would be wise to try and tap into that market. In 2013, China was a major supplier of solar panels to the EU creating a very lucrative opportunity for manufacturers within the Asian country. As these new import duties could reach as high as 46% depending on the manufacturer, EU solar panel developers could become competitive again. However, a skeptic could view the situation as the EU developing its own means of capitalizing on the situation by taxing these imports from China.

3. Balancing for Fairness - Many of the solar panel installation companies within the EU show concern for the import taxes that are being considered. Those at Cleantec Trade, a Belgian supplier of imported renewable-energy products, forecast that a tariff of this nature would greatly impact the development of green-energy solutions within the Union, which could adversely decimate the future for jobs related in the field. If the cost for panels increases, the demand will surely decrease. However, the coalition of manufacturers in the EU seeking the tariff claim that actual installation costs of photovoltaic alternatives would only increase slightly.

When it comes to labor of nearly any kind, you are paying more for the actual labor of installation than for the parts that are used. For instance, a water pump on your vehicle may cost $75, but the mechanic will charge you $350 for the labor for it may entail removing half of the engine compartment just to reach the faulty part. The more difficult the task, the more you spend for labor.

Some will argue that countries such as China produce an unfair advantage when it comes to the global economy. Through internal practices, these countries can mass produce goods for a much lower cost as the country may not impose the same fees and insurances on employees and manufacturers. However, an argument could be presented that less greed diminishes the cost down the line. If materials are sold to manufacturers for less, then the cost of product becomes less. This is then fed to customers at a lower price. Is the EU's new tariff on Chinese imports of solar panels warranted, or are solar panel manufacturers in China trying to develop a monopoly by selling panels for less?

This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: liznelson17 @ gmail.com.

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