A new report from GTM Research and SEIA® shows that the U.S. is central to the solar supply chain with a positive trade flow of $1.9 billion globally. That's up strongly from total net exports of $723 million in 2009.

This runs contrary to some data that indicate that the U.S. runs a large -- and growing -- green trade deficit. In fact, this report from a few years ago claims that the U.S. is in a solar trade deficit. But the devil is in the details, and methodology is crucial in a study of this nature.

SEIA's verdict on solar net-exporter status might come as a surprise to the "domestic-content" and protectionist jingoists in the audience. There is a periodic murmur from industry, trade groups and elements in the U.S. government that unfair subsidies in other countries put the U.S. at a distinct disadvantage in the solar industry -- and those declarations seem reasonable.

If the primary inputs in solar manufacturing -- energy, land and labor -- are deeply subsidized, then it makes sense that there is an uneven playing field. But the real truth, as usual, is a bit more subtle and nuanced than that.

First, here are the key findings from the SEIA report:

  • The U.S. is a significant net exporter of solar products.
  • The largest solar energy product export remains polysilicon, the feedstock for crystalline silicon photovoltaics, of which the U.S. exported $2.5 billion in 2010.

Note that the report makes an important distinction between pure trade balance, which is postive for the U.S. and pretty good at $1.9 billion, and the less concrete but just as crucial concept of "domestic value creation." It's domestic value creation that helps turn solar into a positive trade story. Much of this value came from non-module costs and "soft" costs such as installation, legal fees, permitting, system design and engineering, etc.
Approximately 435 megawatts of PV was installed in the U.S. in 2009, with approximately 980 megawatts installed in 2010.  

2010 was a record year for the U.S. PV manufacturing industry. Exports totaled more than $5.6 billion, with PV polysilicon feedstock and capital equipment leading all components at $2.5 billion and $1.4 billion, respectively. The leading destinations for U.S.-sourced PV components were China and Germany. Meanwhile, U.S. imports of PV products totaled $3.7 billion, the majority of which ($2.4 billion) came from procurement of modules assembled overseas. China and Mexico were the top two sources of PV goods headed to the U.S. in 2010.

Furthermore, the U.S. was a net exporter of solar products to China last year by more than $240 million. The U.S. primarily sold capital equipment and PV polysilicon to China, while China primarily sold PV modules to the U.S.

The completed solar module is not the only indication of the strength of a manufacturing region. The U.S. is still central to the supply chain.

The question remains: will the U.S. manufacturing base continue to keep pace with the growing domestic market or will the U.S. shift to becoming a net importer of solar products?

To download a free copy of U.S. Solar Energy Trade Assessment 2011, visit this link.