STEVE INSKEEP, HOST:
Let's keep talking about energy - solar energy now. 2012 was a good year for solar energy, we're told, and the U.S. is on track to install a record number of solar power systems in this new year - thanks in large part to low cost solar panels from China. That last part is a bit awkward for American manufacturers.
As Lauren Sommer reports from member station KQED, one response is that federal officials have put trade tariffs on Chinese solar panels.
LAUREN SOMMER, BYLINE: Things look busy at the SunPower solar manufacturing plant in Silicon Valley. Workers are screwing frames onto shiny six-foot solar panels as they come off the line.
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SOMMER: This plant has a long list of notable visitors - governors, lawmakers, federal officials. It's because SunPower is a top supplier, and because there aren't many solar plants left to visit.
TOM WERNER: It's going to require being lonely to be one of the winners but it's unfortunate that there aren't many American solar companies.
SOMMER: Tom Werner is the CEO of SunPower. He says the growing market for solar has attracted competition. Chinese manufacturers scaled up quickly and in just four years, solar panel prices fell 75 percent.
WERNER: The economics have gotten way, way more challenging. Difficult for some companies to make it.
SOMMER: SunPower is just hoping to break even this year. Several American manufacturers filed a trade complaint against China, saying companies there are getting illegal subsidies.
In November, the U.S. International Trade Commission agreed and locked in trade tariffs of up to 36 percent. Werner says while SunPower didn't directly join the complaint, it does stand to gain.
WERNER: Let's just say it won't hurt our pricing but I don't know if it will be a big advantage.
SOMMER: The solar industry doesn't need more bad news, says Werner - especially after the political scandal of one particular bankrupt solar company.
WERNER: It's amazing how many people know the name of that company.
SOMMER: Solyndra is the company that shall-not-be-named, kind of like Lord Voldemort in Harry Potter.
WERNER: Well see, if I name the company then I'm just propagating the whole deal.
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SOMMER: It's an entirely different story for solar installers. At Sungevity's Oakland headquarters, company president Danny Kennedy introduces me to the sales team.
DANNY KENNEDY: So the maraca shake happens when there's a sale.
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SOMMER: Sungevity is one part power company, one part Internet startup. The team here designs rooftop solar systems virtually by using satellite photos of each house.
KENNEDY: We grew gangbusters in 2010. Doubled again in '11. Have continued to grow this year.
SOMMER: Sungevity gets its solar panels from the U.S., Korea and from China. Even with the trade tariffs, prices haven't gone up much because Chinese solar companies have found a loophole. There's no tariff if the individual silicon solar cells are made outside of China but then assembled into panels in Chinese factories. Kennedy says focusing on manufacturing jobs is a mistake.
KENNEDY: There's more job density in the sales, finance, installation and maintenance end of the value chain than there is in the factory. It's probably a ratio of about three to one.
SOMMER: Kennedy says a trade war with China puts those jobs at risk.
KENNEDY: We're growing faster than any industry over a hundred billion dollars in value in the global economy. And yet, there is this nabobs of negativity around us that are causing concerns in the investment community. It's crazy talk.
DAN KAMMEN: It is totally a teenager in a lot of ways.
SOMMER: Dan Kammen is an energy professor at UC Berkeley.
KAMMEN: The industry is growing dramatically. There's also incredible turmoil. And there are some of these teenagers who are clearly going to be young prodigies and others who are going to need to go into rehab.
SOMMER: Kammen says when companies fight over market share and race to the lowest price, startups with cutting-edge technology just can't compete. Losing that innovation, he says, could be the real cost of a solar trade war.
For NPR News, I'm Lauren Sommer in San Francisco.
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