Chinese solar panels exemplify trade problems

solar panels
Workers for Verengo Solar Plus install solar panels on a home in California
CBS News

The recent visit by China's Vice President Xi Jinping highlighted the many inequities in international trade resulting from cheap manufacturing there. CBS News correspondent Bill Whitaker reports that to get an idea of what American companies are up against, take a look at the solar panel industry. The Chinese are gaining market share there by leaps and bounds.

Business is heating up for Randy Bishop, owner of Verengo Solar Plus, one of the top residential solar panel installers in California.

"We have added 400 jobs. We expect to add 400 this year as well. These are great jobs that are going to stay here in the U.S.," Bishop said.

Fueling the growth are inexpensive solar panels from China, significantly cheaper than ones made in the United States.

"For a (medium-sized) house, it would be probably be on the order of $3-to-5 thousand more expensive to go with U.S. panels. Customers more than nine times out of 10 vote with their wallet" and buy the Chinese panels, Bishop said.

While installers might welcome the Chinese imports, American panel makers claim the Chinese are unfairly dumping panels on the U.S., killing good U.S. manufacturing jobs.

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Last year the biggest U.S. panel maker closed a plant near L.A.; 100 jobs were lost. A dozen American manufacturers have gone bankrupt, closed down or downsized.

"Just a few years ago, Chinese products were less than 10 percent of the U.S. market. Today they average about half of the U.S. market," said Tim Brightbill, an attorney representing seven American manufacturers.

Brightbill's clients are suing to have the U.S. Commerce Department to slap import taxes on Chinese panels. They say the Chinese solar industry is propped up by huge government subsidies -- a violation of international trade rules.

"The Department of Commerce estimates that China grants more than $30 billion in subsidies to its industries and all U.S. subsidies amount to $1 billion," Brightbill said.

John Baumstark, president of Suniva, says a trade war with China helps nobody. The Georgia panel maker is expanding his plant. He says he has faith in American ingenuity.

"Cost is an important component, but it's not everything. Suniva has managed to grow by continuing to innovate each and every year," Baumstark said.

"We would significantly slow our growth if solar panel costs got more expensive," Randy Bishop the solar panel installer said.

Bishop agrees a trade war could be a disaster, just as record numbers of Americans are turning to the sun for energy. A Commerce Department decision to levy new taxes on Chinese panels is expected this summer.