If Chinese solar companies want to "hold a firm foothold" in the US market, I am afraid there is still a long way to go.
Since the United States launched the "301 investigation" incident in China, the friction between China and the United States in the field of clean energy has never stopped. On December 22, 2010, the United States filed a consultation request under the WTO dispute resolution mechanism with regard to wind power related measures in China. Just as this incident has not yet achieved results, the U.S. government has launched a new round of attacks. On January 7, 2011, when US President Barack Obama signed the military appropriation bill, the head of government signed the military bill was understandable, but it contained a politically provocative special clause that the United States could not purchase Chinese solar panels. There is no doubt that hostility to China is revealed.
Why did the government issue the "Military Prohibition Order"?
According to the report of the “New York Times” of the United States, this clause requires that the United States should not purchase Chinese solar panels, and requested the military to give priority to purchasing solar panels produced in the country. According to reports, the clause was added with the support of some members. Among them, New York State’s Congressman Sich, said that the United States has used a lot of money to invest in overseas markets, especially alternative energy. However, now the United States does not need to make false hands on people, but it is necessary to personally engage in the production of alternative energy products.
According to the professional lawyer's rhetoric, this clause requires that when the Pentagon purchases solar panels, it can only consider signing the WTO government procurement agreement. At present, China has not yet signed this agreement. According to this statement, the U.S. practice does not violate WTO regulations. However, in a similar way, the United States has had a criminal record. After the outbreak of the financial crisis, the Obama administration set a similar clause in the economic stimulus bill to “purchase local goods”, which has aroused great concern in the international community.
In fact, the United States does not invest much in clean energy investment every year. This is why the United States has lagged behind some competitors in clean technology in the past two years. If you want to win in this clean energy race and catch up with other competitors, the United States will have to reluctantly cut back, cut its defense budget, and move 100 billion U.S. dollars out of its defense budget each year. However, this possibility is not great. Even under the predicament of the economic crisis, although the government claimed to cut unnecessary expenditures to get rid of the depressed economy, it did not limit the Pentagon’s expenditure budget. A Pentagon insider has said that the Congress will not cut its national defense budget. Even if it is cut, this money will not be redistributed to the cleantech field. Earlier this month, US Secretary of Defense Robert Gates stated that he would obey the White House directive and reduce the Defense Department’s spending of $78 billion over the next five years, but Gates pointed out that its so-called reduction is only a reduction in spending expectations. The cost will still grow, but it is not as fast as originally planned.
If the United States really wants to use more funds for military expenditures, the difference between this and the other, then subsidies for renewable energy will certainly not have much growth. In the face of a more price-advantaged Chinese solar energy company, the U.S. government is naturally eager to see it. From the consistent attitude of the U.S. government to Chinese solar energy companies entering the U.S. market, it is not surprising to make such a move.
The impact of bans is not small but the United States has always been an active user of clean energy. According to the plan, by 2025, 1/4 of all energy sources used by the United States must come from clean energy such as solar energy. Due to the increasing energy consumption of the US military and the high cost of transporting energy to overseas military bases, the US military is planning to install solar photovoltaic power station systems at more bases. With military spending increasing, the United States will naturally become a strong consumer of clean energy such as solar energy. Therefore, this seemingly insignificant new clause is bound to bring another blow to China's wind power companies.
In the past two years, China has become a major producer of solar panels in the world. Last year, China’s products accounted for at least half of the world’s total, and its market share continued to increase rapidly. The United States accounts for 16 billion U.S. dollars of the total 29 billion U.S. dollars in the solar panel market, and market analysts usually do not calculate sales separately for the Department of Defense. In other words, among the solar panels purchased by the US Department of Defense in the past, it is very likely that a large number of them are “Made in China”.
China is the largest exporter of solar panels. Obviously, who is the target of this "Made in America" clause? In fact, Obama made a similar statement in mid-2010. In a speech, he said: "I don't want to see solar panels, wind turbines and electric vehicles made in China. I hope these products are made in the United States. "So the latest "Made in America" bill is actually the implementation of this idea.
Solar module is a labor-intensive industry. The United States does not have an advantage in its own production. According to analysis by industry insiders in the United States, solar modules imported overseas are 20% cheaper than those produced in the United States. It is expected that this clause will benefit German PV companies. For Chinese companies, looking for business opportunities in the barrier-laden US market will become even more difficult.
The tangled attitude of the U.S. government is no doubt an indisputable fact that many Chinese clean energy companies, including solar and wind power, have entered the U.S. market. The attitude of the United States has changed from a warning in the past to an obstacle now. This kind of change just reflects that the competitiveness of China's new energy companies in the US market is increasing. In the face of this situation, the U.S. government is quite tangled.
To take an example that occurred not too long ago, at the end of 2010, the U.S. government announced that its renewable energy cash back subsidy policy (item 1603) was extended by one year. This deferral bill was soon passed by the House and Senate. However, this policy that was considered by the American wind power industry as a "Christmas gift" made Obama difficult when signing. Regardless of the aspect, the extension of this subsidy policy is a “win-win” for both the Party and the Republican Party, but for Chinese wind power equipment manufacturers, the cash return policy also greatly reduces the entry of Chinese wind power equipment manufacturers and developers. The threshold of the United States, which greatly increased the return on the project, is equivalent to issuing a Gold Pass to new companies entering the US market. This can make Obama really wrestle it once. With the word “Obama” not signed, the United States’ progress in renewable energy will be difficult, and the US’s new energy dominance will be difficult to achieve. By signing, it will greatly reduce the risk of Chinese wind power companies entering the US market.
From this incident, it is easy to see that although the attitude of the US government has always been tough, but for the fact that Chinese energy companies enter the US market, they also have no good way. Whether it was the previous "301 investigation" or the "military ban order," the US government has also set up a barrier for Chinese companies, but also exposed its own flustered. For Chinese companies, it may be considered as another "experience". Such a clause is not the first one and it will not be the last one. Only by learning to deal with it calmly can we go better in the US market.
