SEIA warns of a solar industry ‘death blow’ as Commerce weighs tariffs

The Solar Energy Industries Association (SEIA) launched an attack against an effort by a group of companies that asked the U.S. Department of Commerce to consider imposing tariffs on solar equipment imported to the U.S. from three southeast Asian countries.

In mid-August, a trio of petitions filed by the American Solar Manufacturers Against Chinese Circumvention asked the Commerce Department to impose antidumping (AD) and countervailing duty (CVD) orders on a handful of producers of crystalline silicon photovoltaic cells and modules that are imported from Malaysia, Thailand, and Vietnam.

In a news conference on September 27, SEIA said that the petitions should be dismissed on their merits. More broadly, the industry trade group said that the tariffs would cripple the U.S. solar industry and impact the country’s plans to tackle climate change. The group said that almost 80% of all solar modules are imported from the countries, which include Malaysia, Thailand, and Vietnam.

George Hershman, president and general manager of Swinerton Renewable Energy said that 90-95% of the modules that his company plans to import could be impacted. And he said that “100%” of the 7.5 GW of projects his company has in the pipeline for this year and next is at risk.

“This is absolutely the biggest risk and issue for our company and the industry,” Hershman said during a press conference hosted by SEIA. Hershman chairs the trade group’s executive committee.

Justin Baca, SEIA’s vice president of markets and research, said that AD/CVD tariffs could mean the loss of as many as 45,000 solar energy workers by 2023.

SEIA has said that not enough capacity exists outside the three countries to meet growing domestic demand for solar. Markus Wilhelm, CEO of Strata Clean Energy, said the solar energy is dependent on a global supply chain and so is “vulnerable” to a possible trade disruption.

The Commerce Department could decide within days on whether to launch a trade investigation into solar cells and modules that are imported from Malaysia, Vietnam and Thailand.

The group filed the petitions through the law firm Wiley Rein requesting that Commerce investigate what it said are “unfairly traded imports” from the three countries.

The group said that circumvention of antidumping and duties on Chinese solar products has “hobbled the U.S. industry, eviscerated our supply chains, and put our clean energy future at risk.”

The group asked the Commerce Department to investigate the following companies:

• Malaysia: Jinko Solar Technology Sdn. Bhd.; LONGi (Kuching) Sdn. Bhd. and its affiliate Vina Cell Technology Company Limited and Vina Solar Technology Company Limited; JA Solar (Malaysia) Co., Ltd. or JA Solar Malaysia Sdn. Bhd.
• Thailand: Canadian Solar Manufacturing (Thailand) Co., Ltd.; Trina Solar Science & Technology (Thailand) Co., Ltd.; Talesun Solar Technologies Thailand or Talesun Technologies (Thailand) Co., Ltd.; Astroenergy Solar Thailand Co., Ltd
• Vietnam: Trina Solar (Vietnam) Science & Technology Co., Ltd.; Canadian Solar Manufacturing (Vietnam) Co., Ltd.; China Sunergy Co., Ltd. in Vietnam; Boviet Solar Technology (Vietnam) Co., Ltd. or Boviet Solar Technology Co., Ltd.; GCL System Integration Technology (Vietnam) Co. Ltd.; Vina Cell Technology Company Limited and Vina Solar Technology Company Limited; LONGi Green Energy Technology Co., Ltd.; JinkoSolar (Vietnam) Co., Ltd.

Stalled purchase orders

If Commerce launches an investigation, it could issue a preliminary determination in 180 days. A final determination could come next summer. Any duties would be retroactive to the start of the investigation, which is why companies are reporting an immediate effect on their business.

Hershman told reporters that the largest solar panel manufacturers have already said they will not deliver product for his company’s projects. “We are not able to issue purchase orders,” he said. He declined to name the panel manufacturers.

In an interview with pv magazine shortly after the petitions were filed in August, Timothy Brightbill, a partner in the Wiley Rein law firm said that the group’s requested action is similar to action taken in relation to cold-rolled and corrosion-resistant steel from China. After duties were put in place, Chinese companies were found to be sending steel to third countries for final processing before being exported to the U.S. In that case, tariffs were imposed country-wide. The scope being sought by the group of solar companies he represents is more narrowly focused on a handful of companies.

One question that Commerce will need to consider is the extent to which those countries add significant value to the manufacturing process. The petitions claim that little material value is added. Most of the economic an intellectual capital comes from China where the manufactures are located. The petitions allege that module assembly  has been located outside of China in an effort to skirt U.S. import duties.

SEIA is arguing that more than two thirds of the value of solar panels is created during the manufacturing process in the three countries. It said the manufacturing process is capital intensive and requires skilled labor and that “nearly all” of the critical technological processing occurs within the countries.