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CASM Highlights Worth Of Domestic Value Chain In Ongoing China Battle

In an effort to legitimise recent legal actions against China CASM has released the results of a survey demonstrating the monetary value of the US solar industry value chain spending within the USA.

Four of the founding manufacturers of the Coalition for American Solar Manufacturing (CASM) purchased more than a combined $400 million in goods and services from other manufacturers and employers in 46 states in 2011, according to a CASM survey.  This flow of business highlights just one dimension of solar manufacturing's multiplier effect in supporting jobs and spurring activity across the U.S. economy, according to CASM.  The coalition of about 190 U.S. employers of more than 16,000 American workers contends the nation cannot afford to lose its own industry, particularly in light of advanced manufacturing's power to generate high-paying and stable jobs and beneficial ripple effects, including research and innovation.  Instead, CASM seeks trade-law enforcement to restore legal international competition and domestic manufacturing growth.

CASM is backing an anti-subsidy and anti-dumping trade case against the Chinese industry. In March, the U.S. government issued a preliminary ruling that at least 10 categories of Chinese government programs illegally subsidize Chinese producers of solar cells and panels. China's export drive has caused a dozen U.S. solar manufacturers to shut down, declare bankruptcy or lay off employees in all U.S. regions since 2010, CASM alleges, even though the National Renewable Energy Laboratory concluded Chinese producers face a cost disadvantage in producing and delivering solar into the U.S. market.

According to the CASM purchasing survey, four of the coalition's seven founding manufacturers purchased a total of more than $1 million in goods and services in 21 states and at least $50 million in four states: Oregon ($86 million) and Pennsylvania ($74 million), Michigan ($60.8 million) and California ($50 million). (For more detailed survey highlights, go to the CASM website.) The total helps employers cover payrolls in upstream sectors such as glass fabrication, polysilicon production and aluminum extrusion and downstream services such as auditing, laboratory analysis and transportation.

The survey tally excludes many economic inputs, such as interest and tax payments as well as payroll for employees, ranging from Ph.D. researchers to production workers.  CASM leader SolarWorld, the largest U.S. solar manufacturer for more than 35 years, employs more than 1,100 workers in Oregon and California.  Average annual compensation for permanent, full-time SolarWorld employees exceeds the national average of $45,230 provided by the U.S. Bureau of Labor Statistics. In addition, the survey did not account for downstream support that employees of the four solar manufacturers and their vendors paid out to still other businesses "“ for day-care firms, supermarkets, and car and TV dealers "“ in their own lives, not to mention the personal interest and taxes they paid and the property they purchased.

CASM contends advanced manufacturing at firms such as SolarWorld "“ which undertakes all phases of solar production, from growing silicon crystals to producing wafers and cells to assembling panels "“ is extraordinarily well-recognized as an economic engine.

According to an industry white paper published in March by the SEMI PV Group, which represents companies in the solar energy supply chain, "While PV creates significant job creation in the installation of solar modules (over 50% of total solar jobs are in installa¬tion and sales), long-term job creation in manufacturing will create greater economic stability through a greater multiplier effect that will generate significant additional employment in adjacent industries."

The paper cites National Association of Manufacturing findings, backed by similar results from the U.S. Department of Commerce's Bureau of Economic Analysis, that "each dollar's worth of manufactured goods creates another $1.43 of activity in other sectors, twice the $.71 multiplier for services."

Equally well-established is the intimate connection between manufacturing and innovation "“ as well as the additional business and academic development associated with it, according to CASM.

 "Manufacturing companies in the United States are responsible for over two"thirds of the industrial R&D and employ the majority of domestic scientists and engineers," according to a January report on U.S. competitiveness prepared by the U.S. Department of Commerce in consultation with the National Economic Council. "Furthermore, manufacturing R&D is the dominant source of innovative new service"sector technologies; hence, its benefits reach beyond the manufacturing arena."

Founding manufacturers include Helios Solar Works of Milwaukee, Wis., and MX Solar USA of Somerset, N.J., both solar panel manufacturers. Helios and MX each have production capacity equal to or greater than the only Chinese-owned solar factory in the Western Hemisphere, a final assembly production line in Arizona. Four founding manufacturers have chosen to remain anonymous, a choice that the U.S. Department of Commerce protects to shield them from business retaliation.

The survey of purchasing of goods and services covered SolarWorld, Helios, MX and one anonymous founding manufacturer. Three CASM manufacturers did not participate.

In the next key step in the trade cases, the Department of Commerce on May 17 will announce its preliminary determination on whether Chinese manufacturers have illegally dumped products in the U.S. market and, if so, at what percentage margins. If margins are issued, importers of Chinese solar products would be required to post bonds or cash deposits in the amounts of those margins as duties on further imports.

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