The U.S. solar sector is at the heart of a trade dispute that could wind up imposing tariffs on all imported solar equipment. That’s why the solar industry’s representatives and two bankrupted solar companies gave conflicting testimony on Wednesday that present their specific viewpoints.
At issue is whether the United States should impose tariffs on solar equipment that is mainly imported from China. The investigation into cheap imports comes at the behest of two bankrupt solar panel makers: SolarWorld Americas and Suniva, which is Georgia-based company that is owned, interestingly, by a Chinese conglomerate called Shunfeng International.
But the Solar Energy Industries Association (SEIA) that represent solar makers has come out against tariffs, saying it would “cripple” one of the “brightest spots” on the energy horizon and damage a $29 billion segment of the economy.
Wednesday, the U.S. Trade Representative heard their testimony. In October, the International Trade Commission recommended a tariff of on solar cells of about 30%, and a tariff on solar panels between 10% and 35%. Those duties would decline over a four year period. President Trump is the ultimate arbiter here and he has until January 12, 2018 to make his decision.
The president, of course, has said that he would not hesitate to tax imports as a way to preserve American manufacturing. But the solar energy industry’s chief lobbyist, SEIA, opposes such a move, saying that it will raise solar prices. That would then deter businesses and homeowners from putting panels on their roofs.
China, it adds, is only meeting American demand. At the same time, the president recognizes that if he follows through with such tariffs, China would respond in kind, which would hurt American companies doing business there.
“By the end of the day, the Trade Policy Staff Committee will be fully informed of what’s at stake with this trade case. President Trump now must know that new tariffs would put tens of thousands of American workers out of jobs, including veterans and manufacturers,” Abigail Ross Hopper, chief executive of the SEIA, said in a release. “It is a fact – tariffs would harm our economy and national security and eliminate, not add, manufacturing facilities. This outcome would be inconsistent with an America First agenda.”
“The decision is now the president’s alone to make, and his choice could not be more clear: protect American workers or side with foreign interests trying to exploit U.S trade law and decimate one of our nation’s fastest-growing industries,” she continued. “We hope the US Trade Representative will convey these facts to the president and help him make a decision that puts America First by rejecting tariffs.”
The International Trade Commission unanimously decided in late September that cheap solar imports are hurting domestic solar panel producers. The question then became what it would recommend to the president.
Suniva and Solar World initially filed their case with the trade commission this past April, saying that crystalline silicon photovoltaic cells and modules industry is getting killed by foreign imports that have flooded American markets. The result has been declining prices that have made it impossible to compete, they said, adding that dozens of solar companies have failed.
The two bankrupted solar maker said on Wednesday that the remedies suggested by the International Trade Commission are insufficient.
“The president needs to impose a stronger remedy to that allows the industry to overcome the extensive and long-time efforts of foreign state-support to offset any tariff, and thus to survive and thrive on a permanent basis. A strong remedy is one that foreign governments cannot circumvent, wait out, or overwhelm,” Executive Vice President of Commercial Operations for Suniva Matt Card said, in testimony before the trade rep.
“The Chinese government has made dominance of the international solar market a national priority – including it in their last three five-year plans,” he added.
A key question, of course, is just what the effect that tariffs would have on solar demand in this country. GTM Research says that the anticipated price spike has already caused module prices here to rise from 33 cents in the first quarter of this year to 47 cents now. That equates to a rise from $2.92 per watt to $2.96 per watt in the residential sector, and from $1.54 per watt to $1.56 per watt in the commercial sector, it adds.
That is in line with a 30% tariff — something that “sets the clock back,” the story said, but that is merely a “hiccup” in the scheme of things as far as the rollout of solar power goes.