If it feels like the solar industry is under siege, it might be because it is.
After mostly escaping a potentially destructive change to the tax code that could have severely affected tax equity finance for renewable energy, Politico is reporting that an unreleased memo is circulating in the White House making the case for imposing harsh tariffs against foreign solar module and cell manufacturers.
The report suggests that advisors to the president appear to be arguing the president should ignore the tariff recommendations of the U.S. International Trade Commission, which though broad, were not as harsh as those for which Suniva and Solarwold asked. Instead, the reporting suggests President Trump may want to impose even harsher tariffs than the petitioners requested.
The Section 201 trade case has been a top concern for the solar industry since its filing in March. On the one side, Suniva/SolarWorld made the economic nationalist case, saying unfair global competition had hurt domestic solar module manufacturers and were proximate causes of Suniva’s bankruptcy and SolarWorld’s financial struggles. On the other side, the Solar Energy Industries Association (SEIA) and its allies argued the market, aided by bad business decisions by Suniva and SolarWorld, led to their bankruptcies – not global competition.
It should be noted that two studies by independent firms IHS Markit and Greentech Media have suggested that the trade remedies proposed by SolarWorld and Suniva could slash the U.S. PV market by between 60% and 70%.
One of the reasons that GTM Research says that trade action under Section 201 could be so damaging is that tariffs could potentially apply to nearly all nations in the world (contrary to the Politico article which focused on China). This would make it impossible to either shift to imports from other nations and/or to move manufacturing around Asia, as was done after the imposition of import duties on China and Taiwan in 2014.
Suniva and SolarWorld dispute those reports and have offered their own report suggesting a decision in their favor could create nearly 115,000 new solar jobs.
As expected, the debate inside the White House is between market fundamentalists, who hate tariffs and believe in letting the market sort out solar module manufacturing dominance, and economic nationalists, who believe tariffs will help reinvigorate U.S. manufacturing in the solar market.
If Politico‘s reporting on this memo is correct, it appears the nationalists are winning, which could mean a potential loss for the United States solar market if the predictions by research firms IHS Markit and Greentech Media are correct.
The deadline for the president to decide on whether to impose sanctions is January 26, though a decision could come at any time.
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Tariffs (and substantial ones) are much needed and not just in solar. It is no secret China has gotten the upper hand with unfair and illegal practices, such as resorting to worldwide industrial spionage and not just on PV companies but in many other high tech industries. It is high times to send a strong signal. Besides, when it comes to PV, the unfair subsidies the central, provincial and local governments in China provide to their manufacturers, such as free rent, free utilities, etc., are only possible in a communist regime where a totalitarian government has all the power to manipulate a free market economy. Opposing the tariffs is anti-American, short sighted and plainly supports a Chinese agenda. Our high tech jobs need to come back and this is a starting point. Finally, reporters who take a side on any subject are neither very professional nor truthfull to their occupation by being biassed: “All journalists have their own views, and yet, to deliver comprehensive and authoritative coverage of news and current affairs they must rise above their own personal perspective” quote by D. Brewer of the International Journalist Network.
Thank you for your comment Miguel.
I think it can be a difficult balance with reporters having their own views to expect it not to come out in their coverage, but I agree with the need to rise above one’s own personal perspective. You may be surprised that there is a diversity of viewpoints on this issue on the pv magazine staff, and we are making our best effort to remain fair and to faithfully allow the multiple perspectives on this case appropriate space.
That being said, the Section 201 case is very unpopular in the solar industry, and the vast majority of this industry – including most of our advertisers – oppose trade action and will be negatively affected by it. Furthermore I think that it is not exaggeration to report this as a threat to the U.S. solar market, at least in the near term.
you forgot to mention that by imposing harsh tariffs we are also opening ourselves up to retaliatory tariffs from China.
“Opposing the tariffs is anti-American, short sighted and plainly supports a Chinese agenda.” Interesting. I don’t view myself as anti-American, short sighted and certainly not a supporter of the Chinese agenda. But, I do employ 25 people in our solar company and that feeds, houses and clothes 25 families. Their jobs and income are at risk in the event the tariffs get put in place and it affects solar pricing. I saw the effects of the Chinese tariffs in 2014 and the slowdown it caused in solar. It’s a heck of a risk to take considering there are 200,000 solar employees nationwide. A “token” tariff would be a good solution in my opinion. There are other ways to address the Chinese subsidies without affecting so many American workers.
It might just be that the Trump administration is trying to damage the domestic solar industry with tariffs harsher than the petitioners’ want. They’re no fan of renewables and anything that puts a dent in the rollout of more solar power, plus the rollback of environmental regulations on fossil fuel energy that would assist fossil fuels over renewables is more likely what the intent is, not helping the solar industry.
I own a solar sales and installation firm that employees 20+ people. I find it is easy for those who do not understand this case and the solar market to make nationalist comments and say tariffs would be good for this country in this case. What many of those don’t understand is that both of these companies are foreign owned and both of them have been mismanaged and could not compete due to reasons beyond the importation of foreign panels and cells. They are using our own trade law to benefit foreign interests and it will be at the expense of 88k to 150k jobs. Additionally, even with strong tariffs most in the industry predict that any jobs gained on the production side would generate no more than 5,000-10,000 jobs as most of the factories are automated. So the benefit of losing 88k plus jobs would be a gain of 5,000-10,000 jobs and the profit for a few rich investors or companies.
I cannot imagine how losing a net of 78k jobs after the newly created jobs are subtracted could be beneficial to anyone other than the investors of these companies. The American worker is who will suffer for the bad decisions of those who want to make a point rather than protecting American workers and interests. I pray for all of those impacted that calmer heads who see what is happening to help steer this decision for my employees and the tens of thousands of other American workers who stand to lose their jobs if this goes through.