Exports of US solar products to China delivered a surplus of US$913 million in 2011, despite the demise of America's module manufacturing and Chinese government support for its renewables industry, according to an influential report released today.
Pew Charitable Trusts commissioned Bloomberg New Energy Finance to write the report, Advantage America: The US-China Clean Energy Trade Relationship in 2011, which aimed to reveal greater granularity in America's $296 billion trade deficit with China.
Phyllis Cuttino, director of Pew’s clean energy programme, told PV-Tech: "The report is a little counterintuitive to what we have been hearing so much about in the media overall. The report uncovers what is the nature of our trade relationship with China. It's particularly valuable when it comes to gaining an understanding of the strengths of the US and China."
The report found that the US and China traded more than US$8.5 billion worth of clean energy goods and services in 2011, with a US$1.63 billion sales advantage for US companies in solar, wind and "smart energy" such as LEDs and lithium ion batteries.
Companies based in the US traded more than US$3.7 billion with China, driven by polysilicon and wafer exports, while Chinese companies exported US$2.8 billion in products to the United States.
Finished solar modules accounted for 95% of the solar products exported by China to the US, the report said. China also exported US$151 million worth of solar cells and US$2.65 billion of PV modules to the United States in 2011. By contrast, US firms exported only US$12 million worth of modules to China.
Despite China’s dominance in mass assembly and high-volume module manufacturing, the report found that the US produced more high-value polysilicon and wafers and the capital equipment and systems for solar factories.
Hemlock Semiconductor Group, MEMC Electronic Materials, and the US division of REC Group were named as the world’s third-, fifth-, and seventh-largest polysilicon producers in 2011. MEMC Electronic Materials exported $289 million worth of polysilicon and wafers to China in 2011.
Nathaniel Bullard energy and China analyst at Bloomberg New Energy Finance, said: "The invisibility of the initial parts of the value chain is tough. We had to do a lot of work to winkle this data out of the big companies because they [are often] so large that it's a small subset of one of their businesses. That was where the value came from too in helping to elaborate for people not only what goes into a solar panel, but who makes it.
"We export this capital equipment and specialty stuff to China, which then gets sent all over the world. China sends the finished products all over the world, only a small amount comes back to our US solar market."
Bullard said that there was a small risk that the US might lose its advantage to major Chinese polysilicon producers such as GCL-Poly Energy Holdings.
"China has slapped a tariff on imported polysilicon which could do the same thing as it did for imported Chinese modules here. But the biggest risk is secular - it's oversupply. Anyone with experience in semiconductors can speak to that impact. It happened with memory technologies, display technologies - it's vicious and can go on for a long time. It falls to some of the largest companies in the world to be able to stay in a fight like that until they end up owning the market."
"High-profile clean energy trade cases involving the export of photovoltaic (solar) cells and modules and wind turbine towers from China to the United States also amplify confusion about the nature of clean energy trade between the two countries," the report said.
Last year, the US Department of Commerce put anti-dumping and countervailing duties on Chinese solar panels ranging from 15% to 34%. Meanwhile, China is investigating US polysilicon producers for potential dumping in the Chinese market.
Bullard said that it would be difficult for these tariffs to translate into increased advantage for US companies.
"Tariffs are punitive measures," he said. "Demand signals [help manufacturers]."
But other opportunities for US companies may arise in China in thin film and project development, the report suggested. First Solar commenced "meaningful activity in China only in 2012", it noted.
First Solar and Sunpower have said that they want to start project development in China.