Can Solar Trade Wars Save The West’s Solar Manufacturing Industry?


EU fighting China

Solar trade wars, what are they good for? Absolutely nuthin! Say it again! Uh! (RIP Edwin Starr)

While the ongoing dispute (AKA solar trade war) between Europe and China continues apace, an article caught your correspondent’s eye this week (and was posted in our popular Facebook Page if you’d like to comment). Perhaps the most interesting part of the article is what it hints at: the inevitable change in focus of solar power production from the West to the East.

Business Spectator covered the demise of the Israeli company Solel, which was written off by owner German industrial giant Siemens when no sellers (mugs?) could be found to take the company off Siemen’s hands. Incredibly (or maybe not so given the Chinese solar panel charge on world markets) the solar company has incurred debts of around US$1.4 billion since its acquisition by Siemens in 2009, according to the article.

As the Business Spectator briefly discusses, the decision by Siemens is a symptom of the once-healthy solar power sector in Germany in decline. And the reason is the threat from Chinese solar panels, which are flooding the market with cheap solar panels and components.

Which is of course folks the chief cause of the current solar trade war between the EU and China. However it also begs the question: when is government support for an industry considered an accepted practice and when is it considered illegal dumping?

After all the Europeans have been famous — Hall of Famers really — for their excessive subsidies for their farming sectors over the years of the Common Market. The grand stories of wine lakes (wine producers guaranteed a price for their crops) and butter mountains (the same government subsidies for butter producers) have been grumbled about by world farmers (including Aussies) for years.

The intended result was, of course, to keep prices artificially competitive with overseas exporters. How does this compare with the alleged unfair government assistance from the Chinese government for their own solar power sector.

Total hypocrisy? Or am I missing something here readers? Is one country’s anti-market practices another’s sensible assistance for their vulnerable sectors? And where is the elusive level solar power playing field so beloved of the free marketers?

And even if these questions can be answered adequately, surely the last decade or so has seen a major shift of the solar power focus towards the East? Not only has the production of cheap, serviceable solar panels brought domestic solar power to many millions but innovation also has shifted. Here’s a recent example of China’s near neighbour Japan’s farming sector showing the way.

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