FOR IMMEDIATE RELEASE: May 15, 2012
SCHUMER, BROWN UNVEIL TOUGH NEW PROPOSAL TO LOOSEN CHINA’S GRIP ON U.S. SOLAR MARKET THAT CRIPPLES U.S. MANUFACTURERS
Proposal Would Make Chinese-Made Solar Panels Ineligible for Tax Credits Available to Home & Business Owners
Senators’ Proposal Narrows Scope of Solar Panels Eligible for 30% Tax Credit By Adding Domestic Content Requirement; Plan Will Help Ensure U.S. Companies Aren’t At Competitive Disadvantage in Fast-Growing Solar Industry
Chinese Solar Panel Producers’ Eligibility For Tax Credit Undercuts American Companies & Jobs
Washington D.C. –Today, U.S. Senators Charles Schumer and Sherrod Brown launched a tough proposal to loosen China’s grip on the global solar panel market. The proposal would bar Chinese-made solar panels from qualifying for the 30% tax credit that U.S. individuals and businesses receive for purchasing and installing solar panels in their homes and businesses. Schumer and Brown’s efforts come as the amount of new solar wattage installed in the U.S. has grown more than 70% a year since 2008, yet the vast majority of those solar panels have been Chinese-produced, and undercut U.S. producers and jobs.
Schumer and Brown’s proposal would narrow the scope of solar panels eligible for the existing 30% tax credit by adding a domestic content requirement. Specifically, the proposal would require that 70% of the parts of the qualifying solar panel must be U.S- made—or, if the final point of manufacture is in the U.S., then 50% of the parts must be U.S.-made.
“The federal government has to take China’s strangle-hold on the solar power industry very seriously, and U.S. manufacturers must have every arrow in their quiver to fight back,” said Senator Schumer. “This proposal is tough, but it’s needed to successfully counter China’s unfair trade practices. This hard-hitting plan will level the playing field for U.S. solar producers so that they can compete, create jobs and become a global leader in this rapidly-growing industry.”
“We can’t trade our dependence on foreign oil for a dependence on Chinese-made solar panels,” Senator Brown said. “We went from a solar trade surplus with China to a solar trade deficit in a matter of years. Ohio workers can compete with anyone in the world, but they deserve access to a level playing field. When the Chinese government provides direct export subsidies to its solar manufacturers, that’s not competing – it’s cheating. And it’s costing American jobs in solar manufacturing. American tax code should not make matters worse by incenting the purchase of Chinese-made solar panels. Our plan will ensure that American tax incentives support American solar panel manufacturers.”
Schumer and Brown highlighted the fact that Chinese companies have been able to grow and take hold of the solar industry at a rapid rate, in part because they have taken large, government-subsidized loans from banks. These subsidized rates have led to plunging prices for wholesale solar panel makers in the United States, at approximately $1 a watt of capacity today, down from $1.80 in January and $3.30 in 2008.
China is on the verge of emerging as the world’s largest manufacturer of clean-power generation equipment, particularly solar panels. According to the Department of Energy Information Administration, 57% of all solar photovoltaic cells sold in the United States in 2009 were imported Additionally, China was responsible for half of the world’s production of solar panels in 2008, although 99% were exported. Currently, the IRS provides tax incentives for all solar panels sold and installed in the United States, no matter where they are made. Schumer and Brown said that it makes no sense to let Chinese companies take advantage of these tax credits, on top of the built-in subsidies it already enjoys back in China.
The senators proposed that the Energy Investment Credit or Residential Energy Efficient Property Credit be modified to include a specific domestic content requirement. The senators said this will ensure that the United States emerges as a global leader in the fast-growing solar industry. The tax credits the senators propose modifying are described below:
· Residential Energy Efficient Property Credit: This credit is equal to 30% of the costs of qualified solar electric property and solar water heating property (with no upper limit). This includes any labor costs properly allocable to the onsite preparation, assembly, or original installation of the residential energy efficient property and for piping or wiring to interconnect such property to the home. Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. Expires December 31, 2016.
· Business Energy Investment Tax Credit (ITC): This credit is equal to 30% of expenditures, with no upper limit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Expires December 31, 2016.