The confusion boils down to how Chinese manufacturers code their evacuated tubes prior to export. Tubes coded as components to be used in water heater systems are exempt from the export duty. Tubes coded under other classifications, such as glass products for example, are subject to the tax.
The largest of China's manufacturers are electing to go with the water heater classification in order to keep their prices as low as possible. Some of smaller companies are not able to get away with that because they are selling to customers that might not necessarily be using the tubes for water heater systems.
Manufacturers are obviously troubled by the new coding system they have to deal with. Some have been in business for 10 years or longer, consistently exporting their products under the old water heater system classification. Being told by customs to use the newer code means an automatic jump in their pricing by at least 17%. Smaller companies affected by the export duty say they are already losing business to the larger companies still being allowed to continue under the old classification.
As to why the coding system is being applied differently in various parts of China, no one really knows for sure. However, some speculate the Chinese government is trying to encourage customers to purchase complete solar thermal systems rather than just evacuated tubes. Most of the Chinese products are going directly to India where the burgeoning solar thermal market is big business. Complete systems exported to India are free from the export duty as well as India's 12.85% import duty.
INTERNATIONAL COMPETITION IS GOOD
The market confusion in China does not have a huge impact on solar thermal here in the United States yet. Nevertheless, there is still an important take away here. The fact that we are even talking about export duties on evacuated tubes used for solar thermal systems shows that the market is strong enough to encourage international competition.
Companies would not invest so much money in solar thermal components if there were no future in it. The fact that so much money is involved shows how strong the future of solar thermal is. We believe it is strong enough that solar thermal will eventually become one of the standards for renewable energy options.
The strength of solar thermal energy production is its efficiency. Solar thermal energy is very simple in terms of design, making it possible to produce a significant amount of heat energy with very little loss. That is where the evacuated tube comes into play. Absorption material within the evacuated tube collects energy from ultraviolet rays and transforms it into heat energy. The efficiency of the evacuated tube allows nearly all of that energy to be directed toward generating space heat and hot water at more than 90% efficiency.
Solar America Solutions uses the latest in the evacuated tube technology to manufacture our industry-leading SunQuest 250 solar collector panel. Each of our panels is capable of generating up to 35,000 BTUs per hour, at temperatures of up to 475^0 F. One of our systems can produce hot water and space heat for your commercial building at a fraction of the cost of conventional power sources.
