By Stefan Parhofer Several solar manufacturers have asked the U.S. Department of Commerce to impose tariffs of at least 150 percent on some imported solar panels. Leading the group is SolarWorld Industries America Inc., the U.S. subsidiary of German-based SolarWorld AG. I bring a special perspective to this issue because I am the CEO of the American branch of another German-based solar company that has invested $5 million in the United States and created 20 direct and some 80 indirect jobs the past nine months. Take it from me: The tariffs won’t help most of the U.S. solar industry. Instead, a U.S.-China trade war in the solar sector would hurt both New Jersey’s and the nation’s economies. The only companies likely to benefit are the complainants in this case. That’s because the great majority of the U.S. solar industry isn’t involved in manufacturing solar panels, and low prices for these panels represent an economic, environmental and job opportunity, not a calamity. Over the past 18 months, prices for solar panels have fallen more than 50 percent. Cheaper solar panels means more have been bought and installed in New Jersey — leading to a nearly 100 percent increase in the amount of energy collected by solar panels here in both 2010 and 2011. As a result, the solar industry now employs more than 100,000 Americans, with a growth rate of 6.8 percent last year — nearly 10 times the growth rate in the entire economy. During 2012, the number of jobs in the solar industry is expected to grow by nearly 24 percent. While panels account for more than 30 percent of the costs of a solar system, manufacturing the panels provides less than 5 percent of the solar industry’s jobs. Ninety-five percent of solar jobs are in project development, planning, racking and inverter manufacturing, installation and other services. For every job that a tariff might protect in manufacturing panels, at least three jobs could be lost in the remaining 95 percent of the industry. Many of these jobs would be in New Jersey, which now has the nation’s second-largest market for solar energy systems, trailing only California. With nearly 3,000 jobs in 480 establishments engaged in installing, manufacturing, selling and distributing solar energy systems, New Jersey’s solar sector is growing steadily. This is one of the reasons we, at Gehrlicher Solar America, chose New Jersey in 2010 as headquarters for our U.S. operations. Based in Springfield, we have partnered with, among others, NJR Clean Energy Ventures to construct two rooftop installations in Edison. The two systems together will cover more than 200,000 square feet with more than 5,000 solar panels. Meanwhile, Gehrlicher has 10 more solar energy systems under construction, a few of them for Ikea stores across the East Coast. Many other companies are doing the same that we do: hiring. With unemployment rates high, the solar industry should be encouraged to continue creating jobs, not targeted for tariffs of 150 percent or more on some imported solar panels. In addition to raising prices, discouraging sales and destroying jobs in the solar industry, these tariffs would hurt the U.S. economy in one more way. Solar energy systems in the United States benefit from the Investment Tax Credit and Accelerated Depreciation. By raising the costs of solar energy systems, these tariffs would increase the cost of these tax advantages, thereby sending the bill for protectionist policies to American taxpayers, not Chinese manufacturers. As a native German who moved to the United States only nine months ago, I am impressed by Americans’ ability to see every challenge as an opportunity. Instead of starting a trade war, now is the time to make the most of the opportunities offered by the significant drop in costs for solar energy. The tariffs would put at risk everything that the solar industry has achieved over the past three years: more high-paying jobs, significant economic growth and the transition toward clean energy production. Stefan Parhofer is CEO of Gehrlicher Solar America Corp. in Springfield.
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