On Monday night U.S. Trade Representative Robert Lighthizer announced that President Trump has decided to impose safeguard tariffs on solar module and cell manufacturers for the next five years, starting at 30% and ending at 15% in Year 4.
Neither Mexico nor Canada will be exempt from these tariffs and a statement by the U.S. Trade Representative said nothing about Singapore, which the International Trade Commission recommended to be exempt from global trade sanctions.
The decision also exempts 2.5 GW of cell imports per year, which could keep around 14 U.S. solar module manufacturers identified by pv magazine in business. No current U.S. crystalline silicon solar manufacturing facility currently produces its own cells, with the exceptions of Panasonic (at the Tesla Gigafactory in Buffalo) and SolarWorld.
Interestingly, the statement says the United States will continue discussing long-term solutions with interested parties that could resolve the separate antidumping and countervailing duty measures imposed on Chinese solar products as a result of previous trade complaints brought by SolarWorld in 2012 and 2014, and retaliatory Chinese import duties on which have crippled the U.S. polysilicon industry.
“While I would have preferred to see the Trump Administration not impose any sanctions on foreign module manufacturers, which would have preserved the solar industry in its current form, the tariffs he decided to impose may slow, but will not stop the U.S. solar industry,” said Tony Clifford, chief development officer, Standard Solar. “The solar industry has come through worse policy decisions and will come through this one, too.”
“The solar industry is nothing if not resilient, and I’m confident the innovative, tough and resourceful members of the industry will find workarounds to the latest obstacle placed in solar’s path,” Clifford said. “The Solar Century is here, and not even unfair tariffs will stand in its way.”
MJ Shiao, the head of Americas research at GTM Research, has stated that he sees nothing to suggest that the base for the tariffs will be based on previous years’ prices, as SolarWorld and Suniva had requested. As such, tariffs on modules are expected to be around $0.10 per watt for the most common modules based on multicrystalline silicon cells.
At least one U.S. project developer believes the tariff numbers had been widely anticipated by the market and that the effects will be minimal.
“We do not expect the temporarily higher prices of some modules to diminish the rapid growth of new development opportunities in the United States,” said Doran Hole, ReneSola’s Chief Executive Officer of North America and Group Vice President of Strategy. “Community solar and rooftop distributed generation are two examples of the burgeoning activity we are pursuing. As module prices continue to decline over time, we expect to see accelerating activity in those segments.”
Update: In addition to multiple updates on January 22, this article was updated on January 23 at 8:25 AM to clarify the basis of pricing of the tariffs and exemptions.
Update: This article was updated on January 23 at 9:18 am to add Renesola’s comments.
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When does the decision go into effect? Immediately, or rolled out over time?
Following up in case others had the same question:
From a SEIA comms staffer: “Following statutory rule, tariffs should go into effect Tuesday, February 6, 2018.”
Please help me to understand that if the 201 tariff ruling helps keep 14 x US Module manufacturers in business – how does it ultimately cost tens of thousands of blue collar jobs?
Gary, if you use the example of a 7000 W residental solar system that costs 28,000 $, with the tariff in place the cost will now be about 29,000 $. The numbers are just close enough examples, not actual figures.That makes the produced Solar kWh more expensive and therefore fewer homeowners will install a system. That means fewer jobs in the installer business, fewer jobs in the racking manufacturing business, fewer jobs in the inverter business, and so on. The current ad valorem tariffs will slow the growth of Solar PV down but not stop it. The absolute value of the tariffs will shrink in time due to the 5% reduction every year and the lower production cost for cells and modules against which the tariffs are levied.
This will happen due to the decrease in demand for solar. This will undoubtedly increase the price per watt for solar all around, therefore making it less appealing. Local solar companies will not be able to keep up with overhead if demand decreases.
It costs tens of thousands of blue collar jobs because the increased price of solar will cause a significant drop in installations. Whether purchased in the U.S. or imported, the price will be much higher. Even if more companies move mfg plants to the U.S., it will take time and by then the tariff will be gone. This is a move to block the development of solar in our country by a president that fully supports the fossil fuel industry.
What if I manufacture a PV panel in Europe using solar cells made in USA?
You pay 30% tariffs on the modules.
When might we know more on whether NAFTA still supercedes this decision?
Section 201 is something of a loophole to all the trade agreements we’ve signed. So no, NAFTA will not supercede this decision.
“No current U.S. manufacturing facility currently produces its own cells, with the exception of Panasonic”
FSLR would beg to differ.
We are discussing crystalline silicon cells and modules, and First Solar makes cells and modules as part of an integrated process (as all thin film makers do). So no, First Solar does not produce cells per se, and certainly not as a product. But thank you for your comment, as we will now clarify this.
I deeply feel sorry for my colleagues in the US, but hey you can call yourself lucky that you are not in the washing machine business:
“The washer tariffs exceeded the harshest recommendations from ITC members, while the solar tariffs were lower than domestic producers had hoped for.”
Anyway, if you ordered solar panels and you can not import them to the US anymore, feel free to dump them on our photovoltaic trading platform Solartraders.com. Our EU customers are more than happy to help you out there.
Does anyone know if / how US solars tariffs interact with tribes’ trade authority?
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