Everyone who works in renewable energy – or American manufacturing for that matter – let out a collective sigh of “What is the world coming to?” last November, after Evergreen Solar www.evergreensolar.com an up-and coming solar panel maker in Marlboro, Mass., announced that it would move manufacturing of solar panels to China.
The company blamed its disappointing move on falling prices for solar panels as well as increased competition from overseas suppliers, like those in China.
Now, the cynical interpretation here is something like, “If you can’t beat them join them.” But in reality, when jobs flow overseas, it’s not always a matter of the other country like China winning the business fair and square. Evergreen, like so many renewable energy companies, started out with the best of intentions for creating jobs here in the United States. But along the way, it ran up against a level of competition that was simply impossible to match. How severe is competition from China? Companies are increasingly complaining that it’s not just that the finished goods are cheaper, but that finished goods from China are cheaper than the costs of the raw materials here in the U.S.
How does China do it? Recent reports suggest that China is far more protective – some would say protectionist – of its industry than we are here in the United States. Earlier this week, the National Foreign Trade Council issued a report finding that China is ordering its large state enterprises to favor Chinese manufacturers in their purchases of energy-related equipment, in violation of agreements it made when it joined the World Trade Organization in 2001. And the cries of Chinese currency manipulation making its goods unrealistically cheap have grown so loud that a group of Senators have introduced a bill to take action against China over its currency policy.
We’ll leave it up to lawmakers to examine the possible WTO violations and currency manipulation. But you don’t need an investigation to see that a lot of countries do a lot more than the U.S. to support domestic manufacturing. It’s easy to attack American industry as lumbering and ineffectual when it loses out to overseas companies, but the fact is, these industries need a lot more support than they often get. If we allow a critical industry like solar to move overseas just because solar panels are cheap at the moment, we are being short sighted. Demand will continue to grow, and prices will invariably rebound, but if we are not careful the damage will have already been done.
This is not a story unique to the solar sector, but one that is being played out again and again across the country’s manufacturing base.
