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Commentary: US protectionism on domestic solar industry may backfire
Jackie Chang, DIGITIMES, Taipei [Monday 23 April 2012]

The US government has been taking up anti-dumping and anti-tariff investigations against China-based solar firms. According to LA Times, the US government recently announced the import tariff of 2.6-4.7% on China-made solar products. A second round of tariff may be announced by the Department of Commerce in May, said paper.

China-based solar firms, however, have been finding ways to avoid paying the tariff such as transfering solar cell orders to Taiwan. Taiwan-based solar cell makers have been experiencing rising capacity utilization rates but indicated that orders from China-based firms often have unprofitably low quotes. China does not want to give up on the US market because it is one of the fastest growing solar markets in the world.

According to a new report from Digitimes Research, "PV 2012 - Expectations for the global solar market," growth of solar demand in the US has been shot over 100% every year since 2009. Furthermore, total demand in the US is likely to reach 3.8GW in 2012.

The LA Times coverage indicated that some tariff advocates believe this ruling will help to create jobs in the green sector in the US. However, others noted that most green jobs in the US are in installation, sales and distribution of solar PV systems. The tariff on China-made solar goods is likely to increase cost for solar PV systems and weaken the competitiveness of US-based installation firms.

The global solar supply chain is interconnected. Despite China's strength in producing solar cells and modules in large volume, the US has been dominating the global solar market in polysilicon and solar equipment. If the capex of China-based solar firms fall due to the tariffs, negative impacts will hit polysilicon and solar equipment firms in the US. In addition, increasing the cost of solar PV systems will likely become a deterrent for customers in the US to switch to solar.

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