ITC: Imported PV Cells Hurting U.S. Solar Industry

In a unanimous decision, the U.S. International Trade Commission (ITC) on September 22 found that photovoltaic (PV) solar cells being imported into the U.S. are causing “serious injury, or threat of serious injury, to the domestic industry.”

The decision comes in a highly contested case filed by bankrupt solar panel manufacturer, Suniva, and SolarWorld. The two petitioners argue that imports of foreign-made solar panels and modules have made it impossible for them to compete in the domestic market. To alleviate this burden, the companies have proposed that tariffs be placed on all imported modules.

“On behalf of the entire solar cell and panel manufacturing industry, we welcome this important step toward securing relief from a surge of imports that has idled and shuttered dozens of factories, leaving thousands of workers without jobs,” Juergen Stein, CEO and president of SolarWorld Americas, said in a release following the announcement of the decision.

Two Against All

The rest of the solar cell and panel manufacturing industry, however, does not seem to want SolarWorld speaking on their behalf. Nearly every other company in the U.S. solar industry has rallied against SolarWorld and Suniva. According to several industry experts, the two companies have only themselves to blame for their poor showing in the domestic market.

While SolarWorld argues that the imposition of tariffs would save American manufacturing jobs, according to the Solar Energy Industries Association, the requested tariffs would actually cause a significant loss of American jobs. “Analysts say Suniva’s remedy proposal will double the price of solar, destroy two-thirds of demand, erode billions of dollars in investment, and unnecessarily force 88,000 Americans to lose their jobs in 2018,” Abigail Ross Hopper, SEIA president and CEO, said in a release.

The impact of the tariffs on jobs extends throughout the industry, TJ Kanczuzewski, president and CEO of Inovateus Solar, noted. “It will negatively impact definitely some of the larger projects that are kind of on the books right now for larger U.S. developers, but it’s also going to impact residential installers, so the entire U.S. solar energy value stream is going to be impacted by this, including the 36,000 U.S. solar jobs, that are in manufacturing that are outside of cells and panels. Those jobs are with various products like racking, balance systems, electrical components, combiner boxes,” he told POWER. “If projects stop happening, it impacts other U.S. manufacturers that are not just making solar panels.”

Ron Corio is the CEO of Array Technology, a manufacturer of solar tracking systems for the utility-scale solar industry. Corio is also concerned about the impact the proposed tariffs would have on jobs. “To remain a leading global equipment supplier, it is critical that we continue to innovate at scale in our domestic market,” he said in a written statement. “Array Technologies is a significant employer in New Mexico and has directly created hundreds of jobs in our struggling local economy, not to mention the many more indirect jobs that exist as a result our success.  If this trade case moves forward, it will significantly and undeniably result in tens of thousands of jobs lost across America and will also result in a significant job loss in our local community which desperately cannot afford to have these high-quality jobs disappear.”

The Great Unknown

While the injury finding is significant, much remains unknown. The case will now go into the remedy phase, during which the ITC will work to determine how to address the injury. It may agree to the requested tariffs—40 cents per watt of capacity on imported solar cells and a minimum price for modules of 78 cents per watt—or develop its own recommendation.

The ITC will hold a remedy hearing on October 3 and will make its recommendation by November 13. That recommendation will then be sent to President Donald Trump’s desk. The president will have until January 12, 2018 to decide what to do in the matter.

There could be good news for those opposed to the tariffs hidden in the 4-0 decision. Kanczuzewski told POWER that before the September 22 decision, there were rumblings within the industry that two of the four commissioners are in favor of minimal tariffs. “That’s the word that I got from several manufacturers last week, was that two of the commissioners thought that if they voted in favor, making it a 4-0 unanimous vote, they could help sway the other two commissioners to agreeing to minimal tariffs,” Kanczuzewski said.

While no tariffs would be preferred over any tariff, a 5-10 cent tariff could be okay in the end, Kanczuzewski said. “If a minimal tariff of 5-10 cents would be imposed, I think that that would be palatable to the industry versus a tariff where panel prices could increase to 78 cents a watt, that would be almost doubling the cost for a solar panel,” he said. “So, 5-10 cents that would keep us in the range of maybe 50-55 cents a watt for panels, that can sort of be swallowed.”

Dan Shugar, founder and CEO of NEXTracker, also noted just how extreme the requested tariffs are, stating it seems unlikely the ITC would grant the request. “I am not a legal expert on trade policy, and while the ITC may have felt compelled to find ‘injury’ due to statutory reasons, I am confident they will take a thoughtful approach to any recommended tariffs,” he told POWER. “Clearly, Suniva’s request for 78c/watt, a doubling of solar panel costs, is a preposterous request, and simply staking an extreme position in an effort to sway the ITC to determine the highest possible floor for tariff.”

The Greater Unknown

It’s anybody’s guess what the ITC will determine is an appropriate remedy, but even more uncertain is what Trump will do with the recommendation when he receives it. “How the POTUS will respond is anyone’s guess, which further exacerbates this problem,” Shugar said.

Trump can do just about anything he wants to with the recommendation and not many in the industry are willing to take bets on what the president’s decision will be. He may approve the recommendation of the ITC, come up with his own tariffs to impose, or not impose any.

Trying to find clues in the president’s past actions and speeches is difficult, as in this case, his desire to create American jobs and his desire to impose tariffs on imported goods may be at odds. “I’m a little nervous because I’m never quite sure what the president is going to say or do. Through his campaign and the 2016 election he said that he was going to be the greatest jobs president and this tariff could potentially be quite the job killer in the U.S. solar industry,” Kanczuzewski said. “My hope is that it’s a minimal tariff and it helps save as many jobs as possible in the U.S. However, I’m not confident that the president has done his homework on solar energy and the data that is out there.”

Hope For The Best, Prepare For The Worst

The uncertainty caused by the case has been affecting the solar industry for months, Kanczuzewski and Shugar said, and those impacts are going to continue until the case is put to bed. “The 201 filing has already resulted in lost jobs in the U.S. and, unfortunately, that will continue as projects–especially in the utility and large commercial sector–are delayed.  We should push hard for a prompt resolution of this matter,”Shugar said.

For Kanczuzewsk, the case means that more time and energy at his company has to be devoted to planning for the worst-case scenario, instead of working to grow its business. “I don’t want to impact any of the jobs that we have and the people that we support in Indiana, and Michigan, and beyond. So we’re going to work as hard as we can to make sure that even a max tariff has minimal impact on our company,” he said, going on to state the company is “going to have to spend a little more time on our battle plan versus our development and strategy plans.”

—Abby L. Harvey is a POWER reporter.