Potential disaster: Jigar Shah on Suniva’s Section 201 petition

pv magazine: Global PV module prices have fallen to a level that is very difficult for many manufacturers. What are your opinions of the merits of Suniva’s request for relief?

jigar_shah_headshotJigar Shah: Well, it’s not about merits. The funny thing about Suniva is that they are majority owned by a Chinese company. So I don’t quite understand that part of it.

The most obvious comparison is to the steel tariffs in 2002, and the academic literature shows that it decreased the amount of steel used, it increased costs to consumers 30-40%, and it reduced employment in the United States.

So the question is, what is the intended result of this tariff? Is it to bring back U.S. manufacturing? The only direct comparison we have, which is the steel tariffs of 2002, resulted in a disaster.

 

pv magazine: Section 201 has never been invoked for the solar industry, but Donald Trump as president is also unprecedented. What kind of response do you expect from the Trump Administration?

Shah: I certainly think that they are going to be intrigued by this case. I think the real question is whether they fully understand all the deadlines and all the things they have to do to do it properly. The administrative process has not been the Trump Administration’s strong suit.

This is a very fast process. It is not a multi-year process. It is 30 days instead of 120 days, and then the president can do what he wants to do. We could be faced with real turmoil in the marketplace within six months.

 

pv magazine: Do you think that there is any real chance that President Trump will impose a minimum price at the level that Suniva is requesting?

Shah: Yes. If you are asking if there is a possibility, I think the answer is yes. No one in the Trump Administration has shown any sort of nuance around these issues. A manufacturer in Georgia wants this.

I think people should take this very seriously. SEIA has agreed to lead the response this time, as opposed to last time, and protect the over 200,000 people who work in this industry from stupid policies.

 

pv magazine: Given the wide range of possible outcomes, what do you expect in terms of probable outcomes of this petition?

Shah: The probability depends on what I think is in the president’s head, which is hard to forecast. But if the president really wants to be protectionist, then he is likely to move forward on this.

I’m of two minds here. The solar industry is the largest employer of Trump voters in this country. Over 50% of our industry voted for Trump. He would be putting Trump supporters out of a job. At the same time, I don’t think that he knows that 50% of the solar industry voted for him.

 

pv magazine: Any other angles on this that we haven’t discussed?

Shah: I think that there are so many layers to this that we are all still processing.

 

pv magazine: One thing that I note is that compared to the previous trade cases, the difference in the import price between what Suniva is proposing and actual module prices are far more extreme. Should we conclude that the potential impact on the solar industry and solar employment will also be more extreme?

Shah: This would clearly have a devastating impact on the industry. As opposed to last time, this time people actually have real contracts in place at a certain price, and if this goes through, all of those contracts will be null and void.

 

pv magazine: So are you saying that it is not only the difference in price that we should be looking at, but the speed at which this process moves?

Shah: There are a lot of people who are expecting a certain price for panels, who if that doesn’t materialize they will be devastated in terms of their ability to execute on their goals.