Governors' Wind Energy Coalition

Suniva and SolarWorld Americas are revising their request for trade barriers ahead of a critical hearing tomorrow in a dispute that is headed to President Trump and could upend the U.S. solar industry.

In briefs filed with the U.S. International Trade Commission, the companies are now calling for a tariff of 25 cents per watt on photovoltaic cells, about 37 percent lower than an earlier request of 40 cents.

They are also calling for a 32-cent-per-watt tariff on modules to bring prices parallel with what they were two years ago. The tariffs would ramp down over a four-year period.

Last week, U.S. trade commissioners unanimously sided with Suniva and SolarWorld in finding the companies experienced “serious injury” from a flood of cheap solar imports, primarily from Chinese-backed companies in Asia (Greenwire, Sept. 22).

Tomorrow’s hearing will consider a “remedy” so the ITC can make a recommendation by Nov. 13 to Trump, who can accept the ITC’s views or devise his own response. An ITC spokeswoman said today the agenda for the hearing has not been finalized.

Despite the changes in the numbers, Suniva said the revised proposal would “stop the industry’s bleeding.” The numbers were altered because the companies were able to review new pricing data not originally available, the company said.

“The industry, having been deprived of the financial benefits of high demand over the last several years due to a low-priced import surge caused by foreign market distortions, now finds itself in perilous financial difficulty,” Suniva’s brief said.

Suniva also adjusted its proposal for a floor price on imported modules to 74 cents per watt, down from 78 cents per watt. SolarWorld is proposing a different import quota rather than a floor price. Suniva filed for bankruptcy earlier this year and announced layoffs.

In its brief, the Solar Energy Industries Association — which is strongly opposed to new trade barriers — argued that the two companies are in their current position because of their own mistakes, such as focusing on the residential market and thus missing growth opportunities in the utility sector. Even maximum tariffs would not bring SolarWorld Americas and Suniva back to fiscal health, SEIA said.

“They have also made many missteps that have limited their success even in their preferred residential and small commercial segments,” the group said in its brief. Tariff opponents say trade barriers could halt the industry’s growth and lead to widespread job losses.

Under the law, the ITC has two options: Recommend barriers or non-trade-restrictive “adjustment barriers.” SEIA said ITC recommendations would be most helpful if they focused on helping the domestic industry, rather than imposing tariffs.

That could be in the form of technical assistance of up to $10 million from the Commerce Department to help Suniva and SolarWorld scale up operations and obtain capital to “move toward competitiveness,” according to SEIA.

The group also floated the idea of the Labor Department offering new training and financial assistance to help displaced workers.

Also opposing tariffs are Microsoft Corp., Wal-Mart Stores Inc. and other large companies in the Advanced Energy Buyers Group, which released a letter saying tariffs would make it more difficult for companies to meet renewable energy commitments.

The solar case was the first filed in almost two decades under Section 201 of the Trade Act of 1974. It’s unclear how much heft ITC recommendations will have in the end, since Trump has broad discretion under the law. Many analysts say the president’s “America First” agenda suggests he would support solar tariffs.

Timothy Fox, a vice president at research firm ClearView Energy Partners LLC, said a review of past 201 cases suggests ITC recommendations are “rarely implemented as proposed.”

“President Trump’s decision will be political. We think his ultimate decision may reflect more of the input from political strategists in the White House than economic analysts at the USITC,” said Fox.