Solar Trade Wars: Can Consumers Win?

Last Friday saw the U.S. International Trade Commission (ITC) vote unanimously (4-0) that imports of markedly less expensive Chinese solar panels have harmed domestic solar panel manufacturers. The case, always controversial, now enters a new phase, in which the ITC will assess and recommend potential remedies, including tariffs on imported panels. 

How did we get here? Suniva, headquartered in Georgia, filed for bankruptcy and filed its claim of “serious injury” at the ITC in April 2017. SolarWorld Americas, also bankrupt, joined the petition soon thereafter. The two companies used an obscure provision of U.S. trade law (Section 201 of the Trade Act of 1974) which allows petitioners to request action by the President of the United States. The firms claim that thirty domestic solar manufacturers have gone under as Chinese firms deliberately flooded the market with low-cost panels and point to their own lost facilities and greatly reduced workforces. 

Heated debate continues, ahead of an October 3^rd ITC hearing to examine remedies. The ITC has just a few weeks, until November 13, to deliver recommendations to President Trump, who then has until January 12 to decide. According to the ITC’s news release it can recommend “… an increase in a duty, imposition of a quota, imposition of a tariff-rate quota …, trade adjustment assistance, or any combination of such actions.”

After last week’s decision, SEIA maintained that “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.” SEIA also says tariffs, as requested, would endanger well over half of the utility-scale solar projects envisioned in the next five years. In the other corner, the petitioners say that reviving domestic manufacturing will create nearly 115,00 jobs, with a healthy chunk in manufacturing.

With the “Battle of the Studies” well underway, observers rightly may wonder what new facts and figures can come forward in under two months. As more ink barrels are ordered up for analysis and commentary during the remedy phase, some questions deserve more attention:

• Are foreign manufacturers artificially depressing the cost of solar components? 
• If so, what contribution over time has there been to the overall decrease in utility-scale solar costs of power?
• What does “Made in the U.S.” mean for solar components? 
• What’s the value of encouraging alternative solar generation technologies?
• What’s the correct way to value U.S. reliance on solar manufacturing that sustains independent expertise and supply chain?

Refreshingly unlike most D.C. debates, there aren’t too many sunrises between today and the relevant agency’s decision. Despite the involvement of major companies and trade association, consumers are the underlying winners or losers in this case. A win for consumers will ensure utility-scale solar continues integrating into the generation mix, but at realistic and sustainable prices for the long run, with transparency about technology sources.