Pew: U.S. clean-energy surplus with China attributable to policy

A new report from the Pew Charitable Trusts showing a U.S. surplus in clean-energy trade with China underscores the importance of America taking a leadership role in the sector in order to reap the economic benefits.

That was one conclusion reached by the clean-energy experts at Pew, which released the report last week.

But first, the numbers: According to the report (Advantage America: The U.S.-China Clean Energy Trade Relationship in 2011), the U.S. and China traded more than $8.5 billion worth of clean energy goods and services in 2011, the latest year for which data are available.  U.S. companies enjoyed a $1.63 billion sales advantage over their Chinese counterparts, the report found.

Wind energy was a part of the mix that netted the surplus. Overall, more than $923 million worth of wind energy goods and services were exchanged between the two countries in 2011.  The report noted that, as with solar, the U.S. wind industry excels in sales of relatively high-margin specialty materials (e.g., fiberglass) and sensitive electronic and other control systems. China's largest sales were in turbine towers and rotors.  Overall, U.S. firms held a net trade surplus in wind power of just over $146 million.

Solar, meanwhile, was the largest component of clean energy trade for both countries. Combined, firms based in the two nations traded more than $6.5 billion worth of products and services in 2011. Chinese firms sell large quantities of finished solar cells and modules to the U.S., which led in sales of high value-added goods and services, such as polysilicon and wafers, as well as the high-tech materials and equipment needed in solar manufacturing. On a net basis, the U.S. enjoyed a $913 million surplus in the solar sector.

The report concludes that America's clean energy trade strength is derived from leadership in innovation and entrepreneurship, as well as the global presence of U.S. companies, while China's clean energy industry excels in large-scale manufacturing and high-volume assembly of certain clean energy products. (On a related note, the large components required in the wind power industry have led to the development here in the U.S. of a strong domestic manufacturing supply chain for wind turbines going to American projects.)

Perhaps what’s most notable, though, is that the authors draw a conclusion, based on their hard evidence, that mirrors what the wind industry has long said: wind power must have sound, stable policy in order to maintain its leadership position and to keep growing the associated economic benefits.

"The report findings underscore the long-term economic potential for U.S. leadership in the clean energy sector," said Phyllis Cuttino, director of Pew's clean energy program. "Advantage America demonstrates the payoff for our leadership in wind, solar, and energy smart technology innovation. U.S. companies are tapping into the growing worldwide demand for clean energy goods and services.”

But, Cuttino said, strong policy remains imperative going forward. She continued, “[T]o maintain our competitive edge, it is essential that policymakers recognize and enhance domestic policies that help position U.S. companies for success—investing in research and development, encouraging domestic demand, and supporting overseas sales."

Enough said.

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