China, Inc. Locked In on World Solar, Wind Manufacturing Domination [View all]

[jpak]

http://cleantechnica.com/2012/05/03/china-inc-locked-in-on-world-solar-wind-manufacturing-domination/

The collapse of the USSR and the “liberalization” of formerly closed, socialist economies opened up the path to globalization, which, proponents wanted us to believe, would transcend longstanding political and economic differences and pave the way to a global, free market economy based on fair trade. Well, it hasn’t exactly turned out that way.

It’s abundantly clear, though much less often or openly discussed, just how wide the gap is and differences are between countries with economies based largely on free, open market principles and driven by private sector businesses and capital allocation and those where centralized government planning determines how much and where investment capital will be allocated and how much of what should be produced. Nowhere is this more publicly in evidence than in the recent trade disputes between the US and China regarding the manufacturing and export of silicon solar photovoltaic (PV) cells, panels and wind turbine towers from China to the US.

A Subsidy is a Subsidy is a Subsidy…Not

Now, the US government has been subsidizing the US solar and wind power markets and industries, and these incentives have been a critical driver of rapid growth in terms of “green” job creation as well as economic activity in both emerging renewable energy sectors. Not only are US subsidies dwarfed by those of China, they are fundamentally different in nature and in their results, however.

US state renewable energy/power standards (RPS) and state feed-in tariffs that require a certain amount of electricity be generated from renewable energy resources have been key to rapidly growing clean energy development in the US. So have federal investment and production tax credits and accelerated depreciation schedules.

<more>