For trade watchers, one of the most worrying elements of these cases is the way that the solar-panel and washing-machine companies have gone about seeking remedies. Both have resorted to Section 201 of the Trade Act of 1974. That allows firms broad trade protection but has not been invoked since 2001. It fell out of use because of the high legal threshold for proving injury, and the tendency of previous American governments to reject tariffs in the broader national interest. Companies may be responding to signals from the present administration that it will be sympathetic to claims.
Cheap imported solar cells have fueled an alternative-energy boom in the U.S., making solar cost-competitive with coal and natural gas in some states, and persuading over one million American homeowners to generate their own power. Now President Donald Trump is considering tariffs or other trade sanctions that could slow the flow of foreign cells and protect the handful of remaining U.S. manufacturers.
While the Section 201 process is a bit of a wild card, allowing for a loophole in global trade agreements, it is governed by rules – and SEIA says the request by Suniva and SolarWorld violates those. Specifically, SEIA notes that tariffs under Section 201 can’t exceed 50% of the value of imported goods. According to the latest data from PVInsights, cells are going for $0.21-0.29 per watt, depending on the variety, making a $0.25 per watt tariff well in excess of 50%.
Two bankrupt green energy companies may be given new lives, thanks to the economic protectionism in the guise of “America First.” Suniva and Solarworld, like many companies in the renewable energy industry, have received millions of taxpayer dollars in the form of grants and tax incentives over the past decade. Now, both are pinning their hopes on the Trump administration’s likely move to levy heavy tariffs on foreign competitors. Suniva received more than $20 million in tax credits before going bankrupt. SolarWorld was given over $100 million before filing for insolvency this April. But the subsidies weren’t enough.
Despite determining the U.S. companies suffered damages, the ITC may recommend a lower tariff, a remedy that would not involve a tariff or no remedy at all. Non-tariff remedies could be in the form of a tax incentive for solar cell producers or trade quotas on the imported cells. But given Trump’s protectionist trade agenda, solar energy advocates, industry trade groups and other domestic solar panel manufacturers are concerned that the ITC will propose tariffs that would push up prices for solar panel cells. They contend that the higher prices would benefit domestic manufacturers like Suniva and SolarWorld Americas but would harm the industry as a whole by making it more expensive for consumers to install solar panels.
The verdict is in: By unanimous ruling, the U.S. International Trade Commission found that increased imports are causing serious harm to U.S. solar cell and module manufacturing.
While domestic deployments of solar have grown nearly eightfold in the past five years, U.S. manufacturing has fallen behind. Previous trade cases were intended to stabilize pricing and result in new U.S. module capacity. But domestic production still hasn’t kept pace with deployments.
We estimate that 87 percent of U.S. solar installations in 2016 used foreign-produced panels.
Raising tariffs on solar imports, as the commission is now contemplating, would work at complete counter purposes to these government subsidies. The tariffs requested by Suniva and SolarWorld will make solar products and services in America more expensive and less competitive by removing inexpensive, often imported choices from other solar companies and their customers. The Solar Energy Industries Association and Goldman Sachs both project these tariffs would cost thousands of solar jobs—and past experience in the steel industry suggests they’re right. Simply put, it makes no sense to heavily subsidize the solar industry in order to “jumpstart” it, while at the same time jeopardizing its very existence with anti-competitive tariffs.
Earlier this spring, solar cell manufacturer Suniva filed for bankruptcy, in the process announcing the closure of its Michigan facility. The business subsequently petitioned the U.S. International Trade Commission (ITC), a federal agency that investigates trade disputes, for protection from competition, asking for tariffs to be imposed on foreign-manufactured modules, a move that would likely double the price in the market today. The ITC can recommend such actions under Section 201 of the Trade Act of 1974 and is due to make a decision on Friday. A ruling in favor of Suniva would then send the case to the White House for consideration. Suniva has been joined in its petition by a second company, SolarWorld USA. Although the two companies are putting themselves forward as U.S. businesses that are victims of the free trade agreements that President Trump has vocally opposed, the facts and ownership of the entities tell a different story.
Subsidies aren’t enough. Now solar-panel makers want tariffs.
Billions of dollars in taxpayer subsidies haven’t made the U.S. solar industry competitive, and now two companies want to make it even less so. Suniva Inc., a bankrupt solar-panel maker, and German-owned SolarWorld Americas have petitioned the U.S. International Trade Commission (ITC) to impose tariffs on foreign-made crystalline silicon photovoltaic cells.
Solar cells in the U.S. sell for around 27 cents a watt. The petitioners want to add a new duty of 40 cents a watt. They also want a floor price for imported panels of…
Coming off a record year for U.S. solar installations in 2016, the first quarter of 2017 wasn’t so bad either, according to data released by the Solar Energy Industries Association (SEIA), the industry’s lead trade group. The U.S. saw the installation of more than 2 gigawatts, or billion watts, of new solar capacity, a quarter of it on individual rooftops, according to a Thursday report by SEIA and GTM Research. … Solar now provides about 1.6 percent of U.S. electricity, according to SEIA — reflecting 44.7 total installed gigawatts in the U.S. — and should reach 2 percent by the end of this year. Wind supplies about 6 percent — but solar has had very rapid growth lately.