Solar Industry Awaits President’s Decision on Tariffs
January 11, 2018
President Trump has until later this month to respond to recommendations from the United States International Trade Commission (USITC) to impose tariffs on solar equipment manufactured in other countries.
Companies in China manufacture 60% of the world’s solar cells, according to the International Energy Agency.
The case before the commission comes during a period of explosive growth in solar in the U.S.—an average 68% yearly jump in installed solar capacity in the past decade, according to the Solar Energy Industry Association (SEIA), which represents about 1,000 solar installers and manufacturers and is the lead opponent on the tariff case.
Opponents say trade barriers would increase the cost of solar, stop the surge of growth in solar installations and eliminate jobs. According to the SEIA, 260,000 Americans are employed by 9,000 solar companies in the U.S. Most are installers. About 15% are manufacturing solar products.
The trade case was brought by solar manufacturers Suniva Inc. and SolarWorld Americas, Inc. which filed a petition last April claiming the large volume of crystalline silicon photovoltaic (CSPV) cells and modules that are imported into the U.S. are damaging the domestic PV manufacturing industry. The petition asks for tariffs on solar cells and a minimum price for solar panels. It did not include thin-film solar panels.
Suniva, which was based in Atlanta and was a subsidiary of the Chinese Shunfeng International Clean Energy Limited, filed for bankruptcy in April 2017. SolarWorld, the largest crystalline-silicon solar panel manufacturer in the U.S., laid off more than 300 employees in July 2017 after its German-owned parent company, SolarWorld AG, filed for the German equivalent of bankruptcy.
SolarWorld Americas issued a statement saying, “China’s trade aggression in the solar sector is a textbook example of how the country … has used unfair trade as a battering ram to wipe out a U.S. industry and its employment.”
But the SEIA in its recommendations to President Trump points out the two petitioners for trade barriers were foreign-owned. “Don’t bail out failed foreign firms at the expense of American workers,” the association wrote.
In a letter to the USITC, 27 solar companies in the U.S. opposed new tariffs, stating that “solar must remain competitive on price” in order to compete with other sources of electricity. The National Electrical Contractors Association is also fighting the proposed trade barriers, saying they could “double the price of solar panels and stop solar growth dead in its tracks.”
A bipartisan group of governors from Nevada, Colorado, North Carolina, and Massachusetts are against tariffs and a high minimum price on imported solar modules. “At a time when our citizens are demanding more clean energy,” the governors wrote to the USITC, “the tariff would cause America to lose 47 gigawatts of solar installations….”
In September, the trade commission voted unanimously, 4–0, determining that solar panel imports have hurt the domestic solar manufacturing industry.
The SEIA submitted a brief to the trade commission arguing that restrictions on imports “will result in fewer sales of CSPV cells and modules as purchasers switch to alternative forms of energy.” Instead, the association recommends “direct assistance to ailing domestic producers” through technical assistance from the National Renewable Energy Laboratory (NREL), training programs for solar workers, and import license fees.
In November, the commissioners issued a range of nonbinding trade barrier recommendations that aren’t as tough as the two solar manufacturing companies had wanted, but still stringent enough to impact the domestic solar industry.
The four USITC commissioners recommended a variety of solutions, including a combination of quotas on the gigawatts of cells that can be imported, along with tariffs. The quotas would increase while tariffs would be cut each year over a four-year period. The recommendations for a tariff were as high as 35% on imported CSPV modules.
One commissioner also recommended an import license fee, which would generate an estimated $89 million dollars the first year. The revenue from fees would be invested in CSPV manufacturers in the U.S.
President Trump has until January 26 to decide whether to adopt one of the recommended trade barriers. By law, any remedy would be temporary, and initially could last no longer than four years and, if extended, would last no longer than eight years.
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