Not So Breezy: Chinese Renewable Energy Firms Head to the US
Source:Chief Editor, CCEN   Date:2009-11-25   Author:Tom Pellman

Chinese renewable energy companies are coming to America. In the last month, two major separate deals were announced that will see Shenzhen-based wind-turbine manufacturer A-Power Generation Systems Ltd. and China’s largest solar-panel maker Suntech Power setting up operations in the US, both industry firsts. Up to a dozen other Chinese solar companies are “seriously considering” establishing manufacturing bases in the US to raise their profiles in the country, according to a recent Reuters article.

 

With US unemployment at a 30-year high, their arrival comes at a sensitive time. A-Power’s American entry a rough landing to say the least. In late October, the company announced it would be a part of a consortium to build a US$1.5 billion 600-megawatt wind farm in West Texas. Under the original plan, the 240 turbines would be made in China, promising 30 permanent American “Green Jobs” for installation and maintenance.

 

“Green Jobs” are a big part of Obama’s economic recovery plan, which is why A-Power’s presence in the Texas Panhandle, its measly 30 jobs and it being the recipient TARP funds, triggered a sizable backlash.

 

“The purpose of the Recovery Act was to jump-start the economy and create and save jobs – American jobs," US Senator Charles Schumer wrote in a letter to Energy Secretary Steven Chu. “Yet, the Texas wind farm project would create an estimated 2,000-3,000 clean-energy manufacturing jobs – in China.”

 

Fast-forward three weeks and A-Power – probably grudgingly – ticked off another first: first Chinese wind power company to set up a manufacturing plant on US soil. Though the Texas project’s turbines will still come from Shenyang, A-Power announced it will hire 1,000 US workers to produce 1,100 MW annually at a new US plant at an as-yet undisclosed location. The facility will be immense – almost 30,000 sq m – the same size as A-Power’s China plant, which is claims to be the largest in China.

 

Suntech, which announced plans to build a US$10 million production plant in Arizona earlier this week, enjoyed a warmer welcome given the nature of its investment. The plant will open in the third quarter of 2010, have an initial capacity of 30 MW and a staff of 75 people. Still, Suntech’s Managing Director Roger Efird may have had A-Power’s recent experience in mind at the press conference.

 

“It makes a very positive statement – here's a Chinese solar company that's literally exporting jobs from China to the US,” he said. “We're hoping that this kind of action helps to alleviate the worries that some people have about alternative energy jobs moving overseas.”

 

In the current US economy, it really is all about the jobs. Both A-Power’s repentance and Suntech’s calculated press release are meant to soothe blue-collar Americans (and their elected officials) used to blaming China for “stealing” the country’s manufacturing jobs. Future US-bound companies take note: Don’t expect government approval or welcome to set up shop in the US without some positive news on American job creation.

 

But jobs aside, is setting up shop in the US worth it? Put another way: Will Chinese renewable companies do well in the US, with higher its labor costs, its entrenched heavy-weight competition and its less-enthusiastic government support?

 

It’s hard to say. Presumably, like overseas companies entering China, these US-bound companies will need a period of time for mistakes and learning in their new habitat. These missteps are invariably costly, but with time, ultimately profitable.

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