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Biggest US Solar Industry Problem is not China but Bureaucrats, Paperwork and Utilities

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Red Tape in US Solar Industry

The US Solar Industry has been hogging the news due to the solar panel trade battle with China where Anti Dumping and Countervailing duties have been imposed on Chinese solar panel imports. The industry is divided between supporting the Chinese and those who want to stop the imports. The US Government recently imposed Anti-dumping duties against the Chinese solar panel companies with the total quantum of duties to reach around 35-36% for most of the Tier 1 Chinese solar panel players. This is more than what was expected by the solar industry and has led to a vociferous protest from sections of the Chinese Government. Not surprisingly, a large chunk of the USA Solar Industry too has protested against these duties. Many of the solar companies are in the installation segment where cheaper solar panels from China means more profits and more sales.

However US solar installers and EPC companies are facing more mundane issues like red tape. Solar Industry in the US has much higher cost compared to Germany despite same labor costs. The reason is that there is no common federal unified laws for solar installation. Each city and town have their own rules and regulations regarding solar panel installation such as permits, building laws, connection with utilities. Most of these rules are cumbersome and time taking besides adding a lot of extra costs.

Electricity utilities which are facing a massive challenge from the adoption of distributed solar energy, are using the red tape to further slow down the expansion of solar capacity. In Tenesse, companies are taking 2-3 months to approve installations and making the solar home owners jump through multiple hoops to get solar energy. Note these problems are not isolated to one state but are faced by home owners across many states many of which are solar unfriendly.


The dropping prices of solar panels have bolstered installations of solar systems in Tennessee. But some industry experts say clashes with electric-power distributors and various local zoning and building regulations threaten to put a damper on potential projects.

For instance, the Johnson City (Tenn.) Power Board, the municipal electric utility, has just instituted a $950 up-front charge to allow a home or business solar system to send power to its system, and also adds a $10-a-month solar service charge to the customer’s bill.

More on China USA Trade War

The Global Solar World War is truly on now, with the Chinese Government starting investigation on the imports of solar polysilicon from Korean and US solar companies. Note, we had already predicted this some time back and listed the solar winners and losers in case the Chinese imposed duties.

The US imposition of duties on Solar panel imports from China has raised the hackles of the Chinese Government which considers the solar industry to be strategic to its future growth. While it will not affect the Chinese exports in a big way considering the easy workarounds, it has the potential of making the Chinese Government react negatively. The biggest losers could be the Polysilicon companies and Solar equipment suppliers based in the USA. Note China imports huge volumes of the polysilicon raw material used in solar panels from USA and South Korea. The reason being the the quality made in these countries is better and the costs are lower. With the polysilicon spot prices crashing to below cost, around as low as $20/kg levels, US and Korean companies are being forced to change their LT contracts which were stuck at higher levels.

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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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