Cleantech Industry Competition: How the US Solar Energy Market is Dealing with China

Solar energy is on the rise all over the world. According to a report from the International Energy Agency (IEA), the world has added more solar photovoltaic (PV) capacity since 2010 than it did in the previous four decades. All told, total global capacity exceeded 150 gigawatts in early 2014.
But while countries across the globe are witnessing growth in solar energy, a few key countries are leading the way in terms of growth and innovation. The IEA states that some European countries — particularly Germany and Italy — have been implementing PV development at a large scale.
Even so, it’s North America and China, not Europe, that are leading the way in terms of solar energy. Since 2013, China has led the global PV market, with Japan and the US coming in second and third. Here’s a brief look at how the US is reacting to China’s dominance and what the future for solar energy may look like in that country. 

What China’s solar energy primacy means for the US cleantech industry

The Investing News Network turned to Jessica Reynolds of the Solar Action Alliance to understand the impact of China’s solar energy primacy on the US market. According to Reynolds, “competition is not always healthy, and this is especially the case in relation to the US and China as there is a trade war between the US and China over solar power components that is adversely affecting the US market.”
The causes of this competition are twofold: “one reason is that Chinese (and Taiwanese) components are much cheaper than US-made ones) … further problems are that China is currently at the forefront of developing more efficient cells for energy conversion and it is not only the largest global manufacturer, but also the largest market.”
However, the US market is fighting back against this cleantech industry competition. For instance, new import duties should help to overcome the problem of cheaper Chinese components.

Future steps for the US market

Meanwhile, additional steps need to be taken to fully combat the threat that China currently represents to the US cleantech industry. Namely, “to counteract this competition, US solar energy companies need to continue to reduce costs to make the technology more affordable. Secondly, research and development must continue with regards to energy conversion and storage cells or units.”
Furthermore, Reynolds said that “the US also needs to increasingly be a market for solar, not only a manufacturer. Therefore solar energy and all the government-backed incentive measures must be marketed and continued.”