The Stimulus Will Keep Solar Jobs That Would Go To Asia In The U.S.


The stimulus bill will be a boon for solar companies according to a note from Merrill Lynch’s clean tech analyst Steven Milunovich.

Merrill: The manufacturing credit provides up to $2 billion to fund 30% ITCs for facilities engaged in the manufacture of advanced energy property, subject to certification by the Treasury Department. This credit should boost renewable manufacturing in the US instead of continuing to send jobs overseas. A typical cleantech company creates its technology in the US, builds a pilot plant here, then look to Europe or Asia for the capacity build out to take advantage of tax benefits. For example, First Solar and SunPower built pilot plants in the US then went overseas to produce in volume. In 2002 the US represented almost one-quarter of the world’s solar manufacturing capacity; today that figure is 7%.

Is this a good thing?

Greentech Media Research reported yesterday that Asian manufacturing will account for 82% of all crystalline silicon solar cells production by 2012. Asia will be able to do this because its government provides tax breaks and labour costs less there.

The US should let Asia manufacture the panels with government support while US consumers benefit from the cheaper panels. Starting a manufacturing industry on the back of the stimulus bill seems like a way to create some short term work that will eventually just go out of business.

We’d rather see the cash flow towards research than manufacturing, unless the US can compete long-term on manufacturing with other nations.