US solar industry prepares for possible Trump tariff on Chinese exports

US solar
The US solar industry employs over five times more than coal mining.  Getty Images photo by John Moore.

US solar domestic industry employs 260,000 people

The US solar industry is bracing for a decision from the Trump administration that could see hefty tariffs imposed on solar energy components imported into the United States from China.

Suniva is a manufacturer of high-efficiency crystalline silicon photovoltaic solar cells and high-power solar modules. The Georgia-based, but mostly Chinese-owned company, recently lodged a complaint with the Trump administration and is looking for the government to effectively double the price of imported solar panels to allow US factories to compete.

In May, SolarWorld Americas Inc, a division of Germany’s SolarWorld AG joined Suniva as a co-petitioner in the case.

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Christian Hudson, one of the Suniva lawyers told Reuters the company is looking to give American producers “the opportunity to succeed.”

“If U.S.-based solar manufacturing disappears, then developers and installers will ultimately face greater volatility, as the manufacturing industry will ultimately come from one sector of the world,” Hudson wrote in an e-mail.

Imports from China, Malaysia and the Philippines flooding the US market have helped drive down costs in the solar industry by about 70 per cent since 2010.  About 95 per cent of all cells and panels sold in the United States in 2016 were imported.

As prices dropped, more people and businesses moved to solar energy.  The domestic industry now employs over 260,000 people, most of them are construction workers installing rooftop panels and erecting utility-scale solar plants in US deserts.

With the threat of possible tariffs, some US energy customers are putting some solar projects on hold.  Funding for large US solar deals fell to $1.4 billion in the second quarter, down from $3.2 billion in the first quarter of this year.

Solar farm developers that provide energy to utilities and big companies are particularly vulnerable to any tariff as panels account for as much as half of the cost of their projects.

The White House has yet to comment on the solar trade case, but the Trump administration has vowed to protect steelmakers and other US manufacturers by penalizing so-called “unfair” imports.

But President Trump has also promised to protect construction workers.  Ed Fenster, chairman of Sunrun, a San Francisco-based provider of residential solar electricity says if President Trump imposes tariffs against Chinese solar imports, he could harm over a quarter of a million American blue collar workers he has vowed to help.

The solar industry employs over five times as many workers as the coal mining industry that the President has championed.

“A solar-panel tax imperils what our country needs most: well-paying jobs that can’t be exported or automated,” Fenster told Reuters.

According to Reuters, Trump has wide latitude to levy tariffs to protect domestic firms.  Any action he takes could impact the ability of solar-powered electricity to compete with fossil fuels in powering homes and businesses in the United States.

Tom Warner, chief executive of SunPower Corp told Reuters that a steep rise in prices for panels “could be huge and disastrous for large-scale solar.”  He added “developers are alarmed and planning.”

Some conservative policy groups have joined the fight against the tariff.  The Heritage Foundation and the American Legislative Exchange Council (ALEC) have publicly opposed the petition to impose tariffs on imported crystalline silicon solar products.

The Energy Trade Action Coalition (ETAC) was launched to oppose the trade case that was filed with the US International Trade Commission (ITC).

Trade associations, companies and organizations representing utilities, co-ops, manufacturers, suppliers, solar developers, retailers, local union workers, small businesses, venture capital groups make up ETAC.

Conservative free-trade advocates are also part of ETAC.  These groups are concerned about protectionist measures that they see as potentially damaging a high-tech growth industry in the United States.

ETAC said its mission is to “actively engage with the Trump administration, Congress, the media and the public to raise awareness of the importance of maintaining access to globally priced products to support American energy industry competitiveness, sustain tens of thousands of good-paying American manufacturing jobs, and preserve the principles of free trade in a global marketplace,” according to a press release.

“The Section 201 solar industry trade case will undermine one of the fastest-growing All of the Above Energy jobs sectors in states across the country, solar energy installation,” Sarah Hunt, director of the Center for Innovation and Technology at ALEC, said in a statement to Green Tech Media. “We must avoid rewarding this opportunistic use of U.S. trade laws.”

“Imposing tariffs under Section 201, as Suniva and SolarWorld request, would be a step backward by adding another layer of federal subsidies, which is something the Heritage Foundation opposes in all instances,” Tori Whiting, research associate at The Heritage Foundation told Green Tech Media.

The case was taken up in May and ITC’s recommendation is expected in September.  The ITC proposal then goes to President Trump to change, accept or reject the recommended remedy.