Trade Decision Roils U.S. Solar Industry


September 2017.

Trade protection for U.S. solar panel makers could be a boon for the few domestic manufacturers left in the country, but a drag for the companies that install and sell solar systems to homeowners, businesses and utilities, which worry that it would lead to higher prices for consumers.

The U.S. International Trade Commission on Friday voted 4-0 to support trade barriers restricting solar panel imports. The decision came after two embattled panel makers, Suniva Inc. and SolarWorld Americas Inc., petitioned for a tariff on imported solar cells, the piece of equipment in a solar panel that converts sunlight into electricity.

The case divided the U.S. solar industry, with some panel makers arguing they needed protections against a flood of underpriced imports, and panel installers and others countering that a tariff would raise prices for American consumers, who bought more solar power arrays after cheap imports made them more affordable.

Both sides claim jobs are on the line.

Suniva and SolarWorld predict that trade protections would boost domestic manufacturing and force foreign competitors to open plants in the U.S., creating more than 100,000 jobs across the solar industry.

But the Solar Energy Industries Association, a trade group representing the majority of the solar industry that opposed the proposed tariff, forecasts that more expensive solar panels would hurt demand and cause the sector to shed 88,000 jobs nationwide.

Exactly how it all shakes out depends on what kind of trade protections, if any, the Trump administration enacts. The ITC will forward its recommendations to the White House by mid-November, and the Trump administration will then have two months to make a decision.

«We welcome this important step toward securing relief from a surge of imports that idled and shuttered dozens of factories, leaving thousands of workers without jobs,» said Juergen Stein, chief executive of SolarWorld Americas, an Oregon-based firm whose German parent filed for insolvency earlier this year.

Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, said her group will continue to fight the tariff.

«Any remedy that hampers the growth of the solar industry is not one that we ever would support,» she said.

Some solar installers were dismayed, including Sunrun Inc., which called the ITC vote an «unfortunate decision.»

«If the Trade Commission recommends quotas or tariffs on solar cells and modules, they will be putting America’s 260,000 solar jobs — which cannot be exported or automated — in jeopardy,» said Sunrun co-founder Ed Fenster.

Tesla Inc., which owns solar installer SolarCity, said it remains committed to expanding its solar manufacturing capabilities in the U.S., with or without trade action.

Jeffrey Osborne, an analyst with Cowen, said he expects solar demand would take a hit if trade restrictions are enacted — though just how much of one depends on the details. Any tariff that raises solar panel prices above 50 cents a watt, he said, would put pressure on the entire market.

While foreign solar manufacturers have been talking about opening plants in the U.S. if the Trump administration imposed protections, Mr. Osborne said, he questioned how many would do so given that any trade action is likely to be challenged at the World Trade Organization.

It would take at least a year to build a plant, he added, and a few more to recoup that investment, especially given that higher labor and energy costs make it more expensive, by about 3 to 5 cents per watt, to make a solar cell in the U.S. than in Asia.

«I don’t think people are going to the drawing board tomorrow and start building a factory,» Mr. Osborne said.

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