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Subsidy Nation: Can U.S. Firms Compete Against China?

Publication Date: 
October 21, 2011
The Wall Street Journal
John Bussey

Professor Dan Reicher, Executive Director of the Steyer-Taylor Center for Energy Policy and Finance, spoke with John Bussey of the Wall Street Journal on China's five-year clean energy plan.

Recriminations are still flying over what actually caused the bankruptcy of Solyndra, the U.S. solar-panel company that collapsed after getting more than $500 million in federal-loan guarantees.

The White House maintains that one contributing factor was the rapid rise of China's solar-energy industry. That industry is backed by government subsidies that U.S. business groups say help Chinese firms undercut their American competition. Solyndra's highly public collapse, lumped in with the recent bankruptcies of other U.S. solar companies, has energized the issue.

On Wednesday, a group of U.S. solar-panel makers, led by SolarWorld AG, a German company that makes panels in Oregon, asked Washington to punish Chinese solar firms for allegedly dumping products—or selling them at prices below cost—on the U.S. market. A Chinese solar firm, Suntech Power Holdings Co., rejected the charges as U.S. "protectionism." Consumers, meanwhile, like the cheap prices.


"China is increasingly seen by U.S. companies as a source of capital and a source of policy support," says Dan Reicher, a former Energy Department assistant secretary who is now at Stanford. "The next five-year plan and the projections for spending on clean energy—they're just extraordinary."