Report: Chinese Policies Could Hurt U.S. Renewable Industries

China has enacted a series of policies that have made it one of the largest consumers of renewable energy in the world, but the country has also moved steadily to shut out foreign participation in its renewable energy market, according to a new report commissioned by the National Foreign Trade Council (NFTC). China's Renewable Energy Law, enacted in 2006 and strengthen in 2009, requires utilities to buy all available renewable power and pay full price for it, while offering it at a discount to their customers. The 2007 Medium and Long-Term Development Plan for Renewable Energy in China requires large utilities to have 8% of their power capacity provided by renewable energy by 2020. China has also implemented a $586 billion economic stimulus plan that was largely directed toward renewable energy, and a new program will provide a 50% subsidy for grid-connected solar power systems.

While these actions have spurred rapid growth in renewable energy, the nation has closed itself off to outside companies through policies that require or strongly encourage the purchase of domestically made goods or products based on Chinese intellectual property. As one example, the report notes that the foreign share of wind power equipment has fallen steadily from about 75% in 2004 to about 25% in 2008. In 2009, Chinese imports of U.S.-made wind turbines fell to zero, after reaching about $15 million worth of imports in 2008. Meanwhile, China has rapidly expanded its solar cell production, nearly all of which is exported. Those exports have helped to drive down solar photovoltaic prices, contributing to financial difficulties for some non-Chinese solar cell companies. See the NFTC press release and report (PDF 703 KB). Download Adobe Reader.