Balancing the Solar Trade Deficit with Tariffs and Tax Breaks

Feb. 7, 2012 - PRLog -- Governing on any level is a balancing act. For the US, the challenge right now is to institute regulation and tariffs that slow down the influx of the cheaper solar panels offered by the Chinese in order to give America’s manufacturers the chance to compete. The inherent problem with that is that a tariff on the lower-priced components coming from the Far East will raise the price of installations here in the US and slow down growth, including job growth. How do you do one and eliminate the other?

The recent proposal to impose a one hundred percent tariff on Chinese solar panels will, according to industry insiders, eliminate 50,000 jobs here at home, most of them sales and support jobs for Chinese companies. On the other hand, solar growth is expected to continue at it’s steady pace of 7%, a rate that will see the creation of 140,000 new domestic solar jobs by 2014, regardless of what the cost of panels will be. Do the math and that adds up to +90,000 jobs, all for US companies.

Another way to balance the solar energy trade deficit is to offer tax breaks, incentives, and subsidies to American companies that make solar panels. This brings the cost to the consumer down and keeps the 50,000 potentially lost jobs in place, allowing for even greater growth in the industry and a faster realization of freedom from foreign energy sources. It’s not a new concept. The United States has done it before and continues to do it for another energy market – the petroleum market.

Just after the election of 2008, the American Recovery and Reinvestment Act was passed after getting bipartisan support from both parties and a cooperative effort from a sitting Republican president and incoming Democratic president-to-be. The bill, also known as the stimulus bill, provided some much needed funding for a nation caught in the midst of a serious financial crisis. Some of that money was earmarked as subsidies and rebates for renewable energy. It worked. 100,000 jobs were created between July of 2010 and August of 2011.

What does the future bring? Solar energy works. It’s no longer a question. Wind energy works too, but the wind doesn’t always blow. The sun is always there, even when there are clouds in the sky. Eventually they’ll clear and the sun will shine through. The questions before us now are no longer about viability; they’re about cost control. If the government of the United States can subsidize fossil fuel companies that pollute, they can certainly justify a subsidy for clean solar energy. Don’t you think?  

Regardless of which way the situation is resolved, it will be resolved at some point in the next few months. The solar energy market is too valuable to concede to foreign manufacturers and distributors so don’t put off that solar energy certification or installation course. The jobs will be there, one way or another.