As European renewable energy initiatives seek to radically reform their means of energy production, it would make sense that it be done in the most affordable way possible. However, leading European solar groups have teamed up with EU officials to make sure this is not the case. In light of recent EU allegations of Chinese solar panel dumping in European markets, The European Commission is set to impose a 47 percent tariff on Chinese solar panel imports beginning June 6. A recession plagued Europe driven by renewable energy policies is shooting itself in the foot by implementing a tariff that will increase the price of its energy production.
The imposition of this tariff could not come at a worse time for European consumers. In pursuit of “green energy” production, the U.K. and Germany have already initiated plans to essentially do away with existing energy sources. As I noted in The Commentator, the result has been higher energy prices. Solar power production, being both expensive and inefficient relative to alternative sources, is an industry that requires substantial subsidies to exist. A tariff on Chinese solar panel imports means a step in the wrong direction in terms of making solar energy a more viable energy source.
A tariff on cheap Chinese solar panels not only makes energy production more expensive, but it invites retaliation from the EU’s second largest trading partner at a time when free trade is imperative for economic recovery. The dumping allegations, originally brought forth by German company SolarWorld last September, have already worked to substantiate a 31 percent tariff on Chinese panel imports in the U.S. In response to the U.S. tariff, Chinese officials have threatened a retaliatory tariff. Critics of the new EU tariff worry China will respond in similar fashion.
As Europe seeks to make their renewable energy sources work, it is clear that protectionist policies are not the best strategy for doing so. Renewable energy’s two biggest drawbacks come in the form of efficiency and affordability. Cheap Chinese imports help to solve the latter problem in the solar energy realm. Instead, European solar panel prices rise as the interests of SolarWorld and other European big solar groups stifle foreign competition and take precedence over the consumer.