I enjoyed Joris van Dorp’s comments on “Energy idiocy”: Solar Panel Tariffs. Here’s a lightly-edited reprise of the dialogue:
The tariff’s are imposed because the Chinese state has been heavily supporting the Chinese solar manufacturers financially. Chinese panels makers have been earning only 2$ for every 3$ in costs, with the Chinese state making up the difference. That is called dumping, and the EU and USA are fully in their right to impose tariffs in order to protect their PV manufacturers, who cannot operate similar structural loss making enterprises as the Chinese have been able to do for years.
I invite criticism of my reply:
I agree with all your facts. I also agree with John Cochrane’s main thesis, but I will try to state John’s observations on “Silly Policy” from a “Who benefits?” perspective.
To promote internal growth China has been subsidizing their solar and wind manufacturers. Hence China is literally delivering a “free lunch” to global solar consumers (which basically means heavily taxpayer subsidized PV projects). By “free lunch” I mean a transfer from China’s savers/taxpayers to e.g., German taxpayers/consumers. I mention China’s savers because the financial repression imposed upon the savers is a central part of the Chinese government funding, direct taxes are relatively small.
The Chinese subsidized solar isn’t fun for a German PV manufacturer – but these companies are only in business because of a transfer from German taxpayers to the company. For a German PV installer the Chinese subsidy is a win – their costs go down a bit (not hugely, because the PV cells are a modest part of the life cycle cost of PV solar). Of course the German taxpayer and consumer win.
So there are mostly winners from the Chinese subsidy, unless you are a Chinese taxpayer/saver. Chinese citizens benefit from more jobs, more village farmers employed in the over-sized solar factories.
My personal long run view – I don’t think these Chinese PV companies have a future. How long will OECD taxpayers be willing to continue funding a “feel good” energy policy that obviously doesn’t work?
Today’s update on the “policy that obviously doesn’t work” Cost of German Solar Is Four Times Finnish Nuclear. This is a very instructive analysis of a truly silly energy policy. The true cost is much worse than 4X – see the graphic depicting life cycle costs at the end of the article:
Lastly, if anyone knows of a study demonstrating a solar project that is economically competitive with nuclear without subsidy please comment. By viable I mean all-costs-inclusive life cycle costs. I’m not aware of any PV projects in the first world that would have been built on purely economic grounds). It’s not easy to obtain objective data on any of the wind/solar projects because they are all intrinsically political – and it is definitely not in the politicians’ interest to publish the facts.