A news service for the people of Michigan from the Mackinac Center for Public Policy

As reported in the Wall Street Journal, a group of American companies that make solar panels has called on the federal government to raise tariffs on their Chinese rivals for “dumping their products on the U.S. market.”

Executives of SolarWorld AG, a German-based company that makes solar panels in Oregon, led the group at a news conference here, flanked by both U.S. senators from Oregon.

SolarWorld "can compete with anyone in the world," said Gordon Brinser, president of the company's U.S. unit. But, he added, "illegal subsidies in China" have prompted "the Chinese solar industry to come in and gut and own the U.S. solar industry."

The complaints come in the wake of multiple bankruptcies of government-backed solar companies in the United States, most notably the “green jobs” darling Solyndra. According to the article, American solar panel makers are “struggling with the oversupply from China and other Asian countries.”

The irony is rich: According to the Energy Information Administration, solar gets about 100 times the subsidy received by oil and natural gas per unit of production. Yet executives of these highly subsidized U.S. solar plants are complaining about the alleged subsidies the Chinese government is reportedly giving its own solar companies.

One reason the political allocation of capital usually fails is because the politicians directing the investments generally burden the programs with conflicting goals. In this case, renewable energy subsidies are sold as both a “jobs program” and as a means to “save the earth.”

As I wrote previously, if the ultimate goal is the latter, “[Shouldn’t we] welcome lower-cost Chinese versions of these products, which presumably would bring about our economy’s transition from ‘evil’ fossil fuels even more rapidly?”

If the goal is to create jobs, then government should end “renewable energy” subsidies and mandates altogether, because they kill jobs by raising the cost of energy, a key input to manufacturing and every other sector of our economy. The tiny number of “green energy” jobs is dwarfed by the huge employment losses caused by those higher costs, making our overall economy less competitive.

There’s a simple solution to the American solar companies’ complaint about Chinese subsidies: A bilateral agreement in which both governments agree to end all their “renewable energy” handouts. One suspects this is not what our solar favor-seekers have in mind, however.

St. Lawrence University economist Steven Horwitz discusses how the minimum wage was used to block immigrants from taking scarce jobs during the depression era. See more at "Raising the Minimum Wage, Lowering Opportunity."


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