Solar decision won’t be the end

Source: By Kelsey Tamborrino, Politico • Posted: Wednesday, January 17, 2018

President Donald Trump will make a consequential decision this week on whether to place trade barriers on solar equipment imports. But while whatever he decides could be a potential setback to the young sector as federal subsidies shrink, it’s not likely to be the kiss of death that some advocates had feared.

Here’s the background: Back in October, the U.S. International Trade Commission recommended a combination of quotas and tariffs up to 35 percent on imports of solar cells and panels. Many in the solar industry warned such a blow would hike costs for “the clean energy systems and wipe out up to a third of the solar jobs in the U.S.,” Pro’s Eric Wolff reports. “But panels are only one part of the total cost of building a solar installation, and they now make up less than 20 percent of the overall price of a home system and about one-third the cost of a large, utility-scale plant.”

“I wouldn’t characterize it as an end-game scenario,” said Timothy Fox, a vice president and analyst at ClearView Energy Partners. Eric points out the ITC recommendations are far weaker than the 32-cent-per-watt tariff and import cap sought by the companies that lodged the trade complaint, Suniva and SolarWorld Americas. “Under Section 201, the section of the Trade Act the companies used to file their complaint, the maximum tariff that can be tacked on is 50 percent, a level that if imposed would likely raise the cost of the largest solar power plants by about 15 percent and a little more than 5 percent for the average home system,” Eric writes.

What Trump could do: The president can impose a quota on import levels at the average of the last three years, though he could go beyond that if he can come up with a justification that might be valid to the World Trade Organization, according to trade attorney Terry Stewart. The law allows those tariffs to last for four years. The president, meanwhile, has been pressing his staff to find tariffs he can impose on Chinese companies, Eric reports. Some speculate that Trump may choose to impose only modest barriers on solar, and instead seek more onerous tariffs in the coming weeks for aluminum and steel imports. Read more.