Solar Energy Loans Go International
An effort to boost sales and use of American-made solar panels is well underway. It comes from a partnership between stateside solar manufacturer Evergreen Solar and the Export-Import Bank of the United States (Ex-Im Bank). The two will collaborate to offer low-interest loans to foreign solar developers who plan to use Evergreen Solar products.
The loans are guaranteed by the United States government and may cover up to 85 percent of product cost and 30 percent of subsequent installation costs. The program is intended to increase exports of US-made renewable energy products and one can only assume partnerships will form between Ex-Im Bank and other US manufacturers in the near future. The program is a part of Ex-Im Bank’s Congressional Charter.
Photo Credit: World Maps Online
Solar energy loans are in place in many cities, states and now the federal government as part of a domestic pitch to incentivize solar power at home. The Ex-Im-Evergreen partnership hails the incorporation of that incentive into international trade. Currently, a good number of panels installed here in the US are shipped from abroad, notably China and Germany, where labor is cheap and incentives high, respectively.
This international incentive is part of a growing government focus on incentivizing renewable energy manufacturing and production. The American Recovery and Reinvestment Act (ARRA) instituted tax credits for investments made by manufacturers within the energy efficiency and renewable industries. It put into play an incentive strategy that was sorely lacking here in the States, a lack that had US manufacturers building plants overseas in countries where manufacturing was heavily subsidized. That resulted in a heavy reliance on solar imports. International solar loans are an effort to reverse that trend.
It seems to me that such a loan program may spur some growth but will do little to curb already successful solar imports – unless the cost of importing panels from afar becomes more expensive than manufacturing them here.
During the ongoing age of free trade, tariffs on imports to the US have dropped dramatically. That, combined with inexpensive labor in many Latin American countries and China, has spurred the current import-export deficit we now face – not to mention the challenge for any consumer to find products Made in the USA.
Photo Credit: Sunny Skies
A faster-working and more effective way to increase US manufacturing would be to increase import tariffs, not only on renewable energy products, but across the board. If nothing else, such tariffs could create some revenue for the federal government, which in turn would allow more money for renewable energy, energy efficiency, and green job training.
The only catch is that such tariffs fly in the face of our current business model and meets with strong opposition from international corporations. Indeed, a proposed portion of current climate change legislation would impose a carbon tariff on goods coming into the United States from countries with lax environmental regulations. It has seen incredible opposition, even from the US Chamber of Commerce who claimed that such a move could start a trade war between trading partners.
Yet what good do regulations on our own manufacturing base do when most of our goods come from nations without regulation? What difference does it make? These solar energy loans, as well as domestic manufacturing incentives, are good for the US solar manufacturing industry but we have yet to implement anything near the sweeping change that is definitely possible – change that would put Made in the USA on every solar panel.
Posted on August 26th in Solar Funding by Dan.