Op-Ed: Stakeholder Message to the White House: No New Solar Tariffs!

Source: By Ernie Shea, 25x25 • Posted: Friday, November 17, 2017

Recommendations for addressing a solar trade dispute are now at the White House, and it is expected that any decision President Trump might make on the case will have a profound impact on one of the more successful, strategically critical and economically important industries in this nation’s recent commercial history.

A 60-day clock started on Monday, setting a Jan. 12 deadline by which the president must either accept the recommendations from the U.S. International Trade Council (ITC), reject them, or set his own remedies. We urge other renewable energy advocates to join us and solar industry stakeholders in urging the White House to make the decision that will ensure the growth of the industry and protect tens of thousands of jobs.

The U.S. Trade Representative’s Office (USTR) is expected to give the president its own input on the case, and will hold a public meeting Dec. 6 to discuss it. The Solar Energy Industries Association (SEIA) is calling for stakeholders to submit to USTR their opposition to any tariffs or actions that could adversely affect the solar sector.

For some background on the case: Suniva, a Georgia-based firm principally owned by a Chinese company, and SolarWorld, owned by an “insolvent” German company, joined in a petition to the ITC in April, asking that penalty tariffs be levied on imported solar cells and panels. The commission determined in September that the imports were causing “serious injury” to the manufacturers and following a hearing in October, aired the recommendations it formally sent to the White House this week. (Those final recommendations are not expected to be made public until next month.)

The four ITC members each offered recommendations that varied, though three generally agreed on the imposition of tariffs over four years amounting to 30-35 percent (a price hike of about 10-11 cents), far lower than the punitive levies sought by Suniva of 25 cents per watt on all foreign-made solar cells and 32 cents per watt on all foreign-made panels. Suniva had also sought a floor price for all imported solar products of 74 cents per watt.

While SolarWorld called on the ITC to impose an import limit of at least 0.22 gigawatts for solar cells and 5.7 gigawatts for panels, before tariffs kicked in, the fourth commissioner called for a more generous quota – 8.9 gigawatts for the first year, then an increase of the duty-free limit by 1.4 gigawatts annually over the next four years. The commissioner also called for the U.S. sale of import licenses of one cent per watt, a scheme similar to one proposed by the SEIA.

The president needs to be reminded just who wins, should the ITC’s recommended remedies be imposed. With manufacturing representing a small segment of the U.S. solar industry, a vast majority of those in the sector here vehemently oppose the Suniva-SolarWorld petition, rightfully claiming that imposing any tariffs would raise the cost of solar in the United States and stymie a fast-growing economic sector.

While the petitioning firms say they’ve been harmed by imports artificially priced lower than what they can produce, others in the industry say that Suniva and SolarWorld made bad business decisions during the biggest boom in the history of American solar energy. The industry says the two companies failed to take advantage of opportunities in the burgeoning utility-scale segment of the market. Both firms, it is argued, are now being largely controlled by their creditors who are looking for a bailout.

Today, the solar component manufacturing sector has 38,000 workers making everything from sun trackers and inverters, to U.S. steel-made framing and racking systems. Those component manufacturers argue that if the tariffs are imposed, they will have to lay off workers, resulting in more jobs lost than those the tariffs might add.

That’s an important observation that needs to be brought to the president’s attention. The solar industry is an economic engine that is growing 17 times faster than the rest of the U.S. economy, employing more than 280,000 American workers, and has added more than 100,000 blue-collar jobs to the economy in the last five years. Last year, the industry created 1 out of every 50 new U.S. jobs.

The solar industry has professed trepidation over what Trump may ultimately decide. The president has often dismissed renewable energy. And he has repeatedly said that he will work to promote U.S. manufacturers over foreign competition – protectionist rhetoric that alarms solar sector leaders who fear the president will adhere to his “America First” worldview and impose the penalties on imported solar modules, regardless of the impact they will have on the overall solar industry and component manufacturers here at home. Stakeholders are urged to make clear to the White House their views: No new solar tariffs!