6 ms·

Solar 'poster boy' startup may be forced out of business

31 points by kjhughes 14y ago

draggnar 14y ago
I feel bad that there is a large and unanticipated tariff that is affecting him, but he basically built his business on the promise that he was an American made company, and it turns out they do a critical part of the work in Hong Kong.
- dasil003 14y ago
  If there's no suitable American manufacturer then is it better for him to maintain his naive integrity and shutter the company, or to compromise on one part of the assembly? And in any case, it's irrelevant to the tariff discussion.
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jordanb 14y ago
I found the claim that he is being fined for buying chinese solar panels... dubious. So I figured there must be more to the story. Apparently the "tough import policy" is a limitation to the 30% tax credit people can get for installing solar panels. The rules of the credit were changed in May to make it only apply to american-made panels: http://www.sustainablebusiness.com/index.cfm/go/news.display/id/23707 http://www.sustainablebusiness.com/index.cfm/go/news.display... His company, Sunrise Solar, encourages customers to take the tax credit for his products: http://www.sunrisesolar.net/ http://www.sunrisesolar.net/ This appears to be where the potential fines are coming from.
- kjhughes 14y ago
  Well, that would be a bit of a misrepresentation on roofer Bill Keith's part if true. Are you sure? In May, there was an actual 31% tariff placed by the US Commerce Department on Chinese solar panels: http://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html http://www.nytimes.com/2012/05/18/business/energy-environmen...
  - jordanb 14y ago
    I'm not sure. But I was confused about how an "import policy" could result in him being "fined as much as 250 percent on his solar panels." That didn't seem like the result of any sort of tariff I've ever seen. So I went to his website, saw the tax credit advertisement, figured that might have something to do with it and googled it. And while your linked 31% tariff may be the "tough import policy" referenced in the article, I'm still having trouble understanding how that turns into a 250% fine.
    - kjhughes 14y ago
      Something does seem off there, but maybe it's sloppy reporting. The article states: Unless he can show specific manufacturing documentation by August 29, Keith said he could be fined as much as 250 percent on his solar panels -- an effective rate of $270,000. Besides the 250% "fine", the dangling $270,000 reference (and calling it a 'rate') is confusing.
mbubb 14y ago
One small example but dreadful to see this. Idly thought "too bad he didn't use kickstarter rather than USgovt..."
- archangel_one 14y ago
  The problem isn't how he raised money in the first place, it's about ongoing costs, taxes and tariffs. Kickstarter won't help with that.
stephengillie 14y ago
Why do these fans need such a specialized solar panel? Can't something be redesigned to take a more standard panel? Wouldn't a more standard panel be cheaper to source, and have more suppliers?
- brk 14y ago
  Based only on my assumptions, but dealing with solar panels fairly regularly for solar-powered security cams, it's probably a size/efficiency thing. Spinning a motor takes a fair amount of power, and they probably want the entire unit to be as small as possible. So I'm guessing he is starting with higher-efficiency panels (more power output per given area), and then possibly modifying them to run on different voltages for the motors.
dj2stein9 14y ago
The policy is intended to thwart China from undercutting prices and flooding the U.S. market with cheaper solar panels. I find this rather disturbing. If solar energy is ever going to replace fossil fuels the price of panels will have to fall quite a lot. Is the Obama administration now actively preventing solar energy from becoming cheaper?
- hindsightbias 14y ago
  If fall a a lot means China dumps panels, drives US competitors out of business and then monopolizes the market.
- sp332 14y ago
  Sounds that way, but this article is clearly not telling the whole story. Whatever the policy really is, the Customs Department implemented the policy, and the Department of Commerce will review it later this year.
- powertower 14y ago
  Cheaper at what cost? China is subsidizing their solar manufacturing industry... They spend $100 to manufacture a panel, only to sell it at $50. The government then gives that manufacturer $60 to keep them operating. Their game is to keep doing this until the rest of the world can no longer afford to make domestic solar manufacturing viable. This practice kills the US industry, and doesn't exactly lead to cheaper anything at the end... It just removes competition and establishes a monopoly that then gets to decide the price all by itself.
  - dj2stein9 14y ago
    The US government should also be subsidizing solar energy. If it's not cost competitive against oil, they should subsidize it until it is. The estimates are that by 2020 solar will reach fossil fuel cost parity. So you're only talking 8-ish years to subsidize the solar industry. But instead the incompetent government lets US solar companies go out of business all the while continuing to subsidize oil companies that import from the Middle East. It all just wreaks of hypocrisy and corruption.
mochimama 14y ago
Rather than second guessing this Mr. Keith's situation, why don't you ask Bill Keith himself to explain and produce the "documentation". He does claim to have a letter from some government agency demanding he pay this 250% tariff. I think pieces of all of your comments are true, but it also seems that the big picture is that these regulatory moves always seem to favor the BIG boys, and purposely target the small business to prevent them from competing in a true free market. Solar really doesn't cost anywhere near the actual sum of parts and labor. Can you say "Solyndra"???

31 points by kjhughes 14y ago

I feel bad that there is a large and unanticipated tariff that is affecting him, but he basically built his business on the promise that he was an American made company, and it turns out they do a critical part of the work in Hong Kong.

dasil003 14y ago
If there's no suitable American manufacturer then is it better for him to maintain his naive integrity and shutter the company, or to compromise on one part of the assembly? And in any case, it's irrelevant to the tariff discussion.
- deleted 14y ago
  [deleted]
- deleted 14y ago
  [deleted]

jordanb 14y ago

I found the claim that he is being fined for buying chinese solar panels... dubious. So I figured there must be more to the story. Apparently the "tough import policy" is a limitation to the 30% tax credit people can get for installing solar panels. The rules of the credit were changed in May to make it only apply to american-made panels: http://www.sustainablebusiness.com/index.cfm/go/news.display/id/23707 http://www.sustainablebusiness.com/index.cfm/go/news.display... His company, Sunrise Solar, encourages customers to take the tax credit for his products: http://www.sunrisesolar.net/ http://www.sunrisesolar.net/ This appears to be where the potential fines are coming from.

kjhughes 14y ago
Well, that would be a bit of a misrepresentation on roofer Bill Keith's part if true. Are you sure? In May, there was an actual 31% tariff placed by the US Commerce Department on Chinese solar panels: http://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html http://www.nytimes.com/2012/05/18/business/energy-environmen...
- jordanb 14y ago
  I'm not sure. But I was confused about how an "import policy" could result in him being "fined as much as 250 percent on his solar panels." That didn't seem like the result of any sort of tariff I've ever seen. So I went to his website, saw the tax credit advertisement, figured that might have something to do with it and googled it. And while your linked 31% tariff may be the "tough import policy" referenced in the article, I'm still having trouble understanding how that turns into a 250% fine.
  - kjhughes 14y ago
    Something does seem off there, but maybe it's sloppy reporting. The article states: Unless he can show specific manufacturing documentation by August 29, Keith said he could be fined as much as 250 percent on his solar panels -- an effective rate of $270,000. Besides the 250% "fine", the dangling $270,000 reference (and calling it a 'rate') is confusing.

mbubb 14y ago

One small example but dreadful to see this. Idly thought "too bad he didn't use kickstarter rather than USgovt..."

archangel_one 14y ago
The problem isn't how he raised money in the first place, it's about ongoing costs, taxes and tariffs. Kickstarter won't help with that.

stephengillie 14y ago

Why do these fans need such a specialized solar panel? Can't something be redesigned to take a more standard panel? Wouldn't a more standard panel be cheaper to source, and have more suppliers?

brk 14y ago
Based only on my assumptions, but dealing with solar panels fairly regularly for solar-powered security cams, it's probably a size/efficiency thing. Spinning a motor takes a fair amount of power, and they probably want the entire unit to be as small as possible. So I'm guessing he is starting with higher-efficiency panels (more power output per given area), and then possibly modifying them to run on different voltages for the motors.

dj2stein9 14y ago

The policy is intended to thwart China from undercutting prices and flooding the U.S. market with cheaper solar panels. I find this rather disturbing. If solar energy is ever going to replace fossil fuels the price of panels will have to fall quite a lot. Is the Obama administration now actively preventing solar energy from becoming cheaper?

hindsightbias 14y ago
If fall a a lot means China dumps panels, drives US competitors out of business and then monopolizes the market.
sp332 14y ago
Sounds that way, but this article is clearly not telling the whole story. Whatever the policy really is, the Customs Department implemented the policy, and the Department of Commerce will review it later this year.
powertower 14y ago
Cheaper at what cost? China is subsidizing their solar manufacturing industry... They spend $100 to manufacture a panel, only to sell it at $50. The government then gives that manufacturer $60 to keep them operating. Their game is to keep doing this until the rest of the world can no longer afford to make domestic solar manufacturing viable. This practice kills the US industry, and doesn't exactly lead to cheaper anything at the end... It just removes competition and establishes a monopoly that then gets to decide the price all by itself.
- dj2stein9 14y ago
  The US government should also be subsidizing solar energy. If it's not cost competitive against oil, they should subsidize it until it is. The estimates are that by 2020 solar will reach fossil fuel cost parity. So you're only talking 8-ish years to subsidize the solar industry. But instead the incompetent government lets US solar companies go out of business all the while continuing to subsidize oil companies that import from the Middle East. It all just wreaks of hypocrisy and corruption.

mochimama 14y ago

Rather than second guessing this Mr. Keith's situation, why don't you ask Bill Keith himself to explain and produce the "documentation". He does claim to have a letter from some government agency demanding he pay this 250% tariff. I think pieces of all of your comments are true, but it also seems that the big picture is that these regulatory moves always seem to favor the BIG boys, and purposely target the small business to prevent them from competing in a true free market. Solar really doesn't cost anywhere near the actual sum of parts and labor. Can you say "Solyndra"???