Solar and International Trade Issues

By Andrea Luecke, Executive Director, The Solar Foundation

November 2, 2011

Americans love a good challenge. Our ability to rise to and surmount challenges of a profound and global scale has been demonstrated time and again over the last one hundred years. From the World Wars of the early 20th century to the Space Race, Americans have shown we have what it takes to tackle the great problems of our time.

Although many, like House Republican Cliff Stearns (FL), argue that America has already lost the clean energy race, this sentiment runs contrary to our national character. Perhaps more troubling is that these statements are not an accurate reflection of the United States’ ability to seize the opportunity and prove itself, yet again, as ready and able to excel in the face of adversity. Though we certainly have the ability to compete, we have been reluctant to prove we have the collective will to do so.

In order to properly rise to this latest challenge, we must be willing to both reaffirm our commitment to existing programs and embrace more ambitious and comprehensive policies that not only support the clean energy economy, but help reenergize America as a whole.

Outshining the competition is no small task. In its twelfth Five-Year Plan, China has pledged over $2 trillion to grow its seven “strategic emerging industries” from 5 percent of GDP in 2010 to 15 percent of GDP by 2020. Included in these seven are renewable energy, clean energy vehicles and clean energy technology, each of which is likely to see hundreds of billions of dollars in smart investments over the next five years.  As far ahead of us this massive investment may put China’s clean energy industries, the United States is not stuck at the starting line. Our recently released National Solar Jobs Census 2011 found that the U.S. solar industry employs over 100,000 workers and has grown by 6.8 percent over the last twelve months, nearly ten times the national average employment growth rate. Furthermore, a recent report by the Solar Energy Industries Association has shown the United States had $1.9 billion in solar energy exports in 2010, with a $250 - $500 million positive trade balance with China. The bulk of these exports were from key segments of the solar supply chain, namely polysilicon and photovoltaic manufacturing equipment.

While our competitive position in clean energy relative to China is not yet dire, we will surely fall by the wayside, sacrificing hundreds of thousands of American jobs, if we don’t take steps to ensure growth in these industries. The first and easiest step to secure U.S. competitiveness is to reaffirm our existing commitments to clean energy development by extending current programs. The 1603 Treasury Grant Program, scheduled to expire at the end of 2011, would add an additional 55,000 direct and indirect solar jobs and provide for over 7,000MW of solar installations if extended through 2016.  Continued and increased support for the Department of Energy’s Loan Guarantee Program will be necessary to rival the preferred financing structures the Chinese government offers to its domestic clean energy industries.

Taking our capacity for competitiveness to the next level requires more than just maintaining the policy status quo. A Federal commitment to comprehensive clean energy and climate legislation, such as a strong national renewable electricity standard and greenhouse gas pollution pricing are vital components of overcoming this challenge. If our representatives are unwilling to come together to consider and enact such legislation, we will not be able to compete with China.
 
Throwing in the towel because we’re behind at an early stage, as Rep. Stearns seems to have already done, ignores another important aspect of our nation’s history:  though we persevere and overcome the challenges we set for ourselves, we are often the last ones to the party. We were one of the last entrants to both world wars, but wound up playing a major role in both conflicts. The Soviet Union beat the United States to space, but we were the first to the moon. That we are behind now is no cause for early capitulation, but, instead, should serve as a motivator.