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A Solar Trade War Could Put Us All in the Dark

Solar technology is the result of decades of global competition and collaboration—a trade war would undermine its future.
December 19, 2011

The brewing solar trade war between the United States and China sullies what should be a triumphant moment in the global photovoltaic (PV) industry: the arrival of affordable solar electricity.

After decades of global competition and collaboration, many solar markets around the world have reached grid parity—the point at which generating solar electricity, without subsidies, costs less than the electricity purchased from the grid. In other words, solar technology is ready to be a major contributor to solving our planet’s energy and environmental crisis.

However, trade protectionism threatens to inhibit the solar industry at the very time when it is breaking through to a new level of global interdependence, collaboration, and maturity.

On October 18, the U.S. government was asked to impose tariffs on imports of Chinese solar cells and modules, based on the argument that China-based producers have been heavily subsidized and are selling solar products at unfairly low prices. Perhaps not surprisingly, some Chinese companies have now asked the Chinese government to impose tariffs on imports of American solar products, arguing that U.S.-based producers have been heavily subsidized, too. And just like that, the production of affordable and competitive solar products has become a political liability in the world’s two largest producers and consumers of energy.

The success of the entire solar industry hinges on the success of not one country or one company, but global competition and collaboration, which drives efficiency improvements and cost reductions worldwide. If trade barriers are imposed in the U.S., China, or Germany, it could cause a significant increase in the price of solar products and therefore solar electricity, globally. That could cause a further erosion of political support for the solar industry at a critical juncture.

Altogether, a solar trade war could undermine decades of international innovation and stall the global adoption of advanced solar technology.

Gordon Brinser, president of the U.S. branch of Solar World, one company seeking the tariff imposition, argued that “Solar technology was invented here and we intend to keep it here.” I strongly disagree. Just as the sun is a shared global resource, the history of solar technology, as well as solar industry development, has been equally global. And that’s how it should remain.

The photovoltaic effect was first observed by a Frenchman, Alexandre-Edmond Becquerel, in 1839. Many others improved on Becquerel’s research, such as Willoughby Smith in the United Kingdom. Ten years later, American Charles Fritts created the first working solar cell. Then, in 1887, German scientist Heinrich Hertz discovered the photoelectric effect. That work was further improved upon by Albert Einstein, who published a paper on the photoelectric effect that ultimately resulted in the award of the Nobel Prize in Physics and provided the theoretical basis for the understanding of photovoltaics.

The space race of the late 20th century financed extraordinary PV research, spurring a dramatic jump in the laboratory efficiencies of crystalline silicon solar cells. Russia’s Sputnik 3 and America’s Vanguard 1—satellites launched in 1958—were powered by solar cells. Soon after, solar research institutions around the world began to invest and develop proprietary cell designs to explore the theoretical limits of photovoltaics. For example, in 1985, our team at the University of New South Wales’ (UNSW) School of Photovoltaic and Renewable Energy Engineering (SPREE), in Sydney, Australia, created the first silicon solar cell design to break the 20 percent efficiency threshold. In 1988, Stanford University’s rear point contact cell demonstrated 22 percent efficiency. The next major improvement, demonstrated by the PERL cell from UNSW, produced the first 24 percent efficient silicon cell in 1994, and holds the current world record of 25 percent efficiency.

All of these laboratory accomplishments are critical to our understanding of photovoltaics. But in the laboratory alone, they aren’t much use to humanity. The most exciting part of our work has being seeing the laboratory technology effectively commercialized and making its way into the mainstream market.

This commercialization of solar technology has been equally global.

In 1954, Bell Labs in the United States made PV technology marketable for the first time, with up to 6 percent efficient solar cells that cost roughly $250 per watt. Ten years later, Sharp Corporation in Japan produced one of the first viable solar modules for terrestrial applications. Since then, global competition spurred decades of efficiency improvements and cost reductions across a variety of PV technologies and industry segments. SunPower, based in the U.S., was the first company to effectively commercialize Stanford’s rear point contact cell technology, which set several world records for commercial monocrystalline silicon module efficiency. Suntech, based in China, was the first company to effectively commercialize UNSW’s PERL technology, which immediately set a world record for multicrystalline silicon module efficiency.

As a result of global competition, the cost of a solar module is now about $1 per watt. It’s almost futile to generalize as to which regions contributed most to a certain industry, as there’s so much overlap, and any delineation invites dozens of important exceptions. Many Germany-based manufacturing companies have created great high-precision equipment for mass-producing solar wafers, cells, and modules. Many U.S. companies have played a leading role in driving down the price of silicon—the key ingredient for PV—to now less than $40 per kilogram. China-based companies, several started by my former UNSW students, have done an incredible job developing innovative, low-cost methods for fabricating high-quality solar cells and modules.

Most importantly, all of these companies and countries rely heavily on each other to succeed. Together, they represent a formidable force that has relentlessly driven down the cost of solar electricity with remarkable consistency for more than 30 years. In isolation, they’re relatively powerless.

Just like the sun’s power, the solar industry belongs to us all. Now, the solar industry needs to rise above narrow-mindedness, and in one voice, oppose protectionism in the solar industry. We must remain unified in our commitment to making solar electricity affordable for everyone, everywhere.

Martin Green is the executive research director at the Photovoltaics Centre of Excellence at the University of New South Wales in Australia. Over the past few decades, his lab has made the world’s most efficient silicon solar cells, and his students have gone on to found, or hold key positions at, China’s top solar panel manufacturers, including the world’s largest, Suntech Power.

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