The United States and European Union have decided to negotiate settlements over their trade cases with China. Both the U.S. and China have had numerous complaints, variously accusing the other of unfair trade practices, as covered by ASP in the past. One of the most contentious issues has been over solar technology. The U.S. has accused Chinese solar companies of being unfairly subsidized in order to lower solar cell costs for customers. While these negotiations will likely take months to resolve, the U.S. could be taking proactive steps to increase the availability of solar technology around the country as the demand continues to rise each year.

One of the ways the government can encourage energy efficiency and the use of renewable energy is through tax credits. Most of these credits are geared towards commercial businesses and manufacturers. However, a long-term loan program has been designed for homeowners, known as Property Assessed Clean Energy (PACE). This financing plan allows for clean energy upgrades and for borrowers to pay back their loan over the long term, through property-tax assessments.

The Federal Housing Finance Agency has pushed back against this program for homeowners because the loan takes priority over mortgage payments. With the housing market bouncing back it should be possible to specifically target certain areas for this program to work.  Special tax regulations in specified districts have long been used by local governments to finance improvements; and a similar idea could be used for homeowners. Even if this program is stymied by certain government agencies the market may have found a solution; banks have started to get involved with traditional leasing and loans for installation of clean energy upgrades.

Opening up American homes for clean energy upgrades, including solar panels would create a massive new market for both American and Chinese companies. As ASP analyst Xander Vagg noted, “Comparative American expertise lies in design, finance and deployment, not production.” We are not going to beat the Chinese in low cost production, nor should we aim too. American clean energy companies should be working on efficient and low cost technology that can be produced in China and utilized here. While costs remain too high for most homeowners on their own, the federal and local governments can continue to promote clean energy upgrade loans and work with private banks to raise the necessary capital for more widespread clean energy projects.

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