The price of labor in China has risen. Certainly no where close to that of US labor, but the rise along with the rise in shipping costs have eroded much of the financial advantage of manufacturing panels in China and shipping them here. Labor accounts for no more than 10% of the cost of manufacturing solar panels.

I recently listened to an interview with a manufacturer who is opening a new plant in the US and he felt that he was giving away almost nothing by manufacturing here. Not only the small difference labor costs and shipping costs, but also the ability to be closer to the product. That means not having to maintain company personnel overseas and deal with their travel costs. It also means having a shorter delay between manufacturing and sales, making cash flow issues easier. It means making production changes faster if your R&D people are close to the production lines.

Add to that the fact that much of the equipment used for panel manufacturing and much of the processed silicon comes from the US. (That’s basically where our excess trade balance in solar comes from.) Being closer to the equipment manufacturing and supply sources is an advantage.

GE is opening a very large new thin film plant in Colorado which should be cranking out large quantities of panels in a year or so. They’ve figured out how to do it here.

Fact is, once prices drop a bit more demand is going to soar and a lot of companies spread across a lot of countries are going to be very busy keeping up.

Dr.A.Jagadeesh Nellore(AP),India
E-mail: anumakonda.jagadeesh@gmail.com