The Unique Correlation Between Geoeconomics and Solar Panel Manufacturing
The US solar panel manufacturing industry is honest in saying that China-sourced raw materials can drive down production costs despite paying for importation costs. However, driving down costs would mean a shrunken and burnt-out industry that wouldn’t prioritize quality because of the quantity it can produce using affordable China-sourced materials.
Thankfully, top manufacturers from GAF solar shingles and LG’s NeON solar panels use American and South Korean raw materials respectively. Plus, their entire solar shingle and panel production has a consistent professional oversight, ensuring that all customers will enjoy components and equipment that perform to the manufacturer’s minimum expectations.
This is an example of geoeconomics, which studies the boundaries of traditional geographical, political and economic perspectives. It focuses on the relationships between natural resources and global markets. In this case, China’s surplus raw materials give them leverage to drive down national costs and affect the solar development market in the US.
Learn more about it from VOA News’ coverage about Chinese materials infiltrating American solar panel manufacturing.
An announcement by the U.S. Commerce Department last week that it would investigate allegations that solar panel manufacturers in Southeast Asia are using Chinese-made parts and evading U.S. tariffs has raised alarms concerning both trade and environmental policy.
The department announced March 28 that it would investigate claims by California-based solar panel manufacturer Auxin Solar that solar energy equipment manufacturers in Cambodia, Malaysia, Thailand and Vietnam have close business ties to companies in China that produce the raw materials and some components of solar panel assemblies.
In 2011, the Commerce Department ruled that China was "dumping" solar panels in the U.S. market, or pricing the panels below the cost of manufacturing them. This forced U.S. firms out of the business because they could not operate at a profit while matching Chinese prices.
In response, the Commerce Department imposed tariffs on Chinese solar panels of as much as 250% of their sales price. The result was a rapid decline in U.S. imports of Chinese solar equipment, from $2.8 billion in 2011 to less than $400 million in 2020.
In its complaint, however, Auxin points out that as imports of solar panels from China fell by 86% over that period, imports from Cambodia, Malaysia, Thailand and Vietnam surged by 868%. The company also produced evidence suggesting that during that period, exports of raw materials and solar panel parts from China to the four named countries also surged.
Investigation timeline
In a statement emailed to VOA, a Commerce Department spokesperson confirmed that the investigation had been initiated, saying that "Commerce will conduct an open and transparent investigation to determine whether circumvention is occurring. This inquiry is just a first step — there has been no determination one way or the other on the merits, and no additional duties will be imposed at this time."
The Commerce Department said it would complete its preliminary investigation within 150 days and make a final determination within 300 days.
So far, the response of the four affected countries to the department's announcement has been limited. The government of Thailand announced that it had filed a formal letter of complaint with the agency.
You can always count on us at Roper Roofing & Solar to provide you with the best solar panel installations for GAF and LG NeON installations. Contact us today to learn more.
