One U.S. company operating in the fast-growing solar industry announced it has to close a manufacturing plant, and it is blaming the federal government.
Hemlock Semiconductor, a subsidy of Dow (DOW) Corning (GLW), announced last week it had to shutter a facility in Clarksville, Tennessee, in part because of market conditions arising from "global trade disputes." These conflicts are tied to an escalating series of import taxes between the U.S. and China, a spokesman for the company told CNBC.
The Hemlock announcement came just one day after the Department of Commerce said it would institute even stricter tariffs against Chinese-made solar products. That ruling came after German-owned SolarWorld (XETRA:SWVK-DE)-which claims to be America's largest solar panel manufacturer-petitioned for help to guard against what it said were unfair trade practices from China .
Both Hemlock and Solarworld have become unlikely victims in a battle between the world's two largest economies, and dueling policies that are spilling over into the alternative energy sector.
Some in the U.S. solar industry said the government's decision to implement the new tariffs is counter-productive to its own environmental, employment, and manufacturing goals. They argue the government's position makes it hard for solar companies to compete globally.
"This is not protectionism: We're getting disrupted, this is actually a net bad thing for U.S. jobs," said Jigar Shah, chairman and co-founder of the Coalition for Affordable Solar Energy (CASE). "Some people say anything we can do to poke China in the eye is fantastic, well that's short-sighted."
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The Department of Commerce did not immediately respond to a request for comment.
For its part, Hemlock found "the continued market adversity and complex political conditions have left no economically viable options for Hemlock Semiconductor to operate the site," its president, Denise Beachy, said in an announcement. Hemlock makes polycrystalline silicon used in the manufacturing of solar cells and modules.
Shah said the difficulties experienced by Hemlock are being felt throughout the industry. Solar manufacturing and installation relies on a global supply chain that requires some components to start in the U.S., get assembled in China, then come back across the Pacific for final touches.
"Many of [CASE's] members are going to have to lay people off," Shah said. "But the real layoffs are coming from people who aren't getting hired...Raising prices on solar modules mean that many of the projects we've already signed are going to become uncompetitive."