photo: US Army Environmental Command/Creative Commons
I could get behind the buy US provision if it was something more holistic, talking about rebuilding American manufacturing, rebuilding more local and regional economies, but this is just rank protectionism and economic nationalism: As the New York Times and others have reported, lurking in the recent military authorization law signed into effect late last week, there's a provision that bars the Department of Defense for purchasing non-US made solar panels. Ah, were it so simple.Greentech Media has the exact wording of the provision and beat me to the punch highlighting how the whole thing will be more nuanced in practice than what Congress had in mind, so let's recap that first.
Here's the passage:
SEC. 846. PROCUREMENT OF PHOTOVOLTAIC DEVICES. (a) CONTRACT REQUIREMENT.--The Secretary of Defense shall ensure that each contract described in subsection (b) awarded by the Department of Defense includes a provision requiring the photovoltaic devices provided under the contract to comply with the Buy American Act (41 U.S.C. 10a et seq.), subject to the exceptions to that Act provided in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.) or otherwise provided by law.
Provision Could Hurt the One US Solar Power Industry With An Overwhelmingly Positive Trade Balance
The first immediate thing that pops to mind is that while it's true the US imports lots of finished solar power products, with China leading the pack in terms of imports, in fact the United States exports more solar power products and components than it imports, $723 million worth of them in 2009. But rather than being in the form of finished panels (where US imports only slightly exceed exports) it's in the form of polysilicon.
Greentech rightly points out that by preventing the Pentagon from purchasing foreign-made solar power products it well may hurting the US polysilicon industry, which is the one thing that tips the trade balance for the whole solar power products in the US' favor--all in the name of protecting-slash-supporting US manufacturing.
And then there's the essential conundrum of globalized business:
What if the solar panels are made in the Philippines by a US-based firm like SunPower? What the modules are made in Arizona by a China-based firm like Suntech? What about German firm like SolarWorld build panels in the Pacific Northwest?
Colonial History Reversed?
As the NYT points out, there's the perception that the Chinese solar industry is unfairly subsidized and this is hurting American companies, as well as other nations. At least based on the trade balance analysis for 2009 from which the above info is derived, that view isn't really borne out--even if it is true that for the solar products the US imports, we import about $150 million more than we export to China. It's worthwhile noting, too, that the second biggest source of solar power imports to the US is from Mexico, $349 millions worth.
Hidden just under the surface of the of the anti-Chinese subsidy rhetoric seems to be good ole fashioned nationalist rhetoric--combined with a seeming lack on understanding on the part of Congress on what's the current US role in the global solar power manufacturing and supply chain.
Is it possible that it doesn't sit well with lawmakers that at least for solar power, the US occupies the historical place of colonized nations, supplying raw materials to be exported, then manufactured and reimported?
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More on Solar Power:
US Exported $723M More Solar Power Products Than It Imported in 2009: New Trade Balance Report
How the US Military Could Bring Solar Power to US Market
US Solar Power Installations Set To More Than Double in 2010