US solar power groups await ITC ruling on higher tariffs
Call from bankrupt panel maker threatens to have devastating impact on jobs
US solar power businesses are braced for an imminent decision from the country’s International Trade Commission on whether to start a process that could lead to a sharp contraction in the market and thousands of job losses.
The ITC is considering a call from Suniva, a bankrupt Chinese-owned manufacturer of solar cells and panels in the US, for higher tariffs on imported products to stop low-priced foreign competition. The commission is expected to make a decision soon on whether to investigate the company’s complaint.
The case could be an early test of President Donald Trump’s trade policies and stance on renewable energy. If the tariffs sought by Suniva are imposed, they would sharply increase the price of panels, also known as modules, and the silicon cells used to make them, and it would be harder for solar power to compete against other energy sources.
The Solar Energy Industries Association, the lobby group, has warned that the tariffs would threaten thousands of jobs in occupations such as designing, installing and managing solar power systems, which account for about 85 per cent of the employment in the sector.
Abigail Ross Hopper, president of the SEIA, said: “If demand goes down, which we think is a likely outcome [if the administration accedes to Suniva’s request], that will affect employment all across the supply chain, and all across the country.”
The US solar industry has grown rapidly in recent years, in large part because of the plunging cost of imported photovoltaic modules from countries including China, Malaysia and South Korea, which have made solar an increasingly competitive form of electricity generation. Last year there were about 260,000 people employed in the US solar industry, with only about 38,000 of those in manufacturing.
Suniva argues that the US industry making cells and modules is “disintegrating”, with 4,800 jobs lost since 2012, over which time the market share taken by US producers has dropped from 21 per cent to 11 per cent. Suniva itself went into Chapter 11 bankruptcy protection in April.
The company has petitioned for relief under Section 201 of the 1974 Trade Act, which was last used 15 years ago in 2002 to protect the steel industry.
It has called for an initial tariff of 40 cents per watt of capacity on all imported solar cells, and a minimum price for modules of 78 cents per watt, which would roughly double the price of solar modules in the US.
That tariff would cut the expected market for solar photovoltaic capacity in the US by about 60 per cent over 2018-21, according to IHS Markit, the research group.
That prospect has horrified businesses that use imported panels, such as rooftop solar providers. David Bywater, chief executive of Vivint Solar, one of the leading US residential solar companies, said he was watching the Suniva case closely.
“It’s all about jobs,” he said. “If that [case] passes, it will have a really destructive impact on the sector.”
John Berger, chief executive of Sunnova Energy, another rooftop solar company, has written to the ITC arguing that “this proposed action by a small investment firm that made a poor investment decision should not be allowed to hurt American jobs and consumers.”
The first hurdle for Suniva is persuading the ITC that it is “representative” of its industry, and so justifies a full investigation. A decision on that is expected soon. Once the investigation is launched, it can take up to 150 days from the company’s first complaint. If the ITC determines that imports have caused “serious injury”, or the threat of it, then it will be for Mr Trump to decide what remedies to impose.
With other companies in the industry generally ranged against Suniva, there is a chance that it will fail at that first hurdle. It accounted for just 20.6 per cent of US silicon solar cell and module production last year, and in a bizarre twist, its own majority shareholder has opposed its action. Shunfeng International, which owns about 63 per cent of Suniva, said in a statement last week that the Section 201 case “is not in the best interests of the global solar industry”.
One trade lawyer said: “That raises a huge question right away over whether Suniva is really representative.”