Between a rock and a hard place with Chinese solar panels
“Currently the European governments are deciding on new legislation which would influence on the future of cheap solar panels from China.”This potentially, could put an end to the current influx of cheap and affordable (PV) photovoltaic solar panels which many households have benefited from over the last couple of years.
Many people across the United Kingdom would have noticed the solar panel bonanza which has seen this type of technology springing up in homes all around the country.
This has occurred through two main reasons.
The first reason is the ‘better than keeping your money in the bank’ incentive rates from the past and present feed-in tariffs. The changes in government support for PV solar installations have been a real driving force for consumers looking forward at future energy costs.
Secondly is the lower cost of the panels themselves, most of which have been sourced from Chinese suppliers at below market costs. The advantages for people who have already installed are obvious.
Trade disputes like this one usually come about because one side feels disadvantaged and this is true with this one too. Currently, the Chinese own and operate through geographical and resource acquisition of most of the world’s rare earth metal mines, which are essential for the manufacture of today’s PV solar panel technology.
This allows the Chinese to dominate and sell below cost, while western solar manufactures can’t. This has led to a dominance which both US and European manufacturers have cried foul. This issue has already been dealt with in the US through an imposed import tariff of all Chinese manufactured panels. This leveling of the playing field has protected US firms and the same is being called for in Europe too.
As the big debate in the solar industry rages on with many countries wanting to stop the ‘dumping’ of below manufacturing cost panels to help keep the playing field level for homegrown manufacturers and those that want to continue to take advantage of this recent bonanza, of which the consequences on both sides of the argument have put the whole industry between a rock and a hard place.
Either way, there will be winners and losers which will affect the pricing of such systems for years to come. My advice to anyone considering having an installation now or within the next few years would be to make your choice sooner.
I have been saying for years, you’re better installing sooner rather than later, and never has this statement rung truer than it does today.
If you look at both sides of this trade dispute, the only winners will be the people who took advantage of this once in a lifetime window of opportunity.
A world with or without cheap Chinese solar panels
With manufacturers and installers having opposing views on this subject, its best to analyse the issue from outside the argument. Manufacturers want to continue to manufacture and sell on a level playing field and installers and their customers want to be able to continue to install panels cheaply.
A Europe with cheap manufactured solar panels may sound almost Utopian, but as we are finding out with traditional oil and gas energy, becoming addicted and dependent on a single source, can and does store-up problems for the future.
Maybe the Chinese intentionally flooded the US and European markets to gain dominance in this increasingly important technology. Holding a monopoly over the world’s future energy technologies would be very rewarding for them. So flooding the markets with below cost panels may benefit us today, but could cost us (the west) later.
Self-interest is what drives manufacturers to want to continue to manufacture. Self-interest is what drives installers to keep prices as low as possible, but to complete the triangle, self-interest is also what drives China to ‘dump’ below cost panels into the solar markets too.
This ‘between a rock and a hard place’ situation is unlikely to be resolved without one group being unhappy, but whatever the European authorities decide, the future of cheap solar panels is undoubtedly drawing to an end.
If the EU decides to oppose the import tariff, then only time will tell if the panels will remain cheap after European manufacturers are priced out of the markets.
But what is certain, is the high costs of energy overall, increasingly limited competition in the markets and limited and controlled rare Earth commodities will drive the cost of photovoltaic panels for future consumers upwards.
There really has never been a better time to install solar panels for your home or business.
"Feel the pride."Stuart Lovatt May 29, 2013
Founder of Heat My Home.