Solar Import Tariff Proposal Splits the Industry

Guest essay by Eric Worrall

President Trump is expected to rule imminently on a petition by US solar manufacturer Suniva to impose tariffs on cheap imports of solar panels.

Prospect of Trump tariff casts pall over U.S. solar industry

Reuters Jul. 25, 2017, 1:03 AM

By Nichola Groom

LOS ANGELES (Reuters) – U.S. solar companies are snapping up cheap imported solar panels ahead of a trade decision by the Trump administration that could drive up costs and cloud the fortunes of one of the economy’s brightest stars.

The White House would not comment on the solar trade case. But the administration has vowed to protect steelmakers and other U.S. manufacturers by penalizing “unfair” imports.

That has the solar industry bracing for the worst. Panic buying has sent spot prices for solar panels up as much as 20 percent in recent weeks as installers rush to lock up supplies ahead of potential tariffs.

Skittish U.S. energy customers are putting some solar projects on hold. Manufacturers are eyeing other markets to develop. And some investors are running for cover. Funding for large U.S. solar deals fell to $1.4 billion in the second quarter, down from $3.2 billion in the first quarter and $1.7 billion a year earlier, primarily due to concerns about the trade case, according to research firm Mercom Capital Group.

Developers of solar farms that provide utilities and big companies with energy are particularly vulnerable; panels account for as much as half of the cost of their projects.

Competitors have long complained that Chinese companies use government subsidies and illegal dumping to capture market share. The United States in 2012 slapped duties averaging around 40 percent on firms from China, and in 2014 imposed average duties of about 20 percent on producers from Taiwan, according to GTM Research.

Those levies are still in effect. But Suniva, which filed for bankruptcy protection in April, is looking for more. Less than two weeks after its Chapter 11 filing, it lodged a rare form of trade complaint with the U.S. International Trade Commission (ITC).

In its petition, Suniva said previous tariffs weren’t working because China and Taiwan were just shifting production to other low-wage countries to avoid the duties.

It asked the government to establish a minimum price of 78 cents a watt on panels produced anywhere outside the U.S. to keep companies from circumventing the penalties. That’s more than double the average of 35 cents a watt that prevailed before the recent price run-up.

Read more: http://www.businessinsider.com/r-prospect-of-trump-tariff-casts-pall-over-us-solar-industry-2017-7/

What a mess. Manufacturing jobs pitted against installation jobs, in an industry which wouldn’t exist were it not for clumsy political efforts to promote rooftop solar at the expense of useful sources of electricity. US manufacturer Suniva, which Reuters says is majority Chinese owned, challenging cheap imports from Chinese companies manufacturing outside the US.

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77 thoughts on “Solar Import Tariff Proposal Splits the Industry

  1. Hard to tell the good guys from the bad in this solar energy scramble. I got it! The good guys are the one is business a year after all tax breaks, subsidies, etc. are gone.

    • Solar is horrible.

      Solar kills nearly as many birds and bats as wind. Long term, the panels break up and will contaminate the ground and water.

      Most significantly, subsidized solar is distorting and weakening the market for normal conventional electric power. Anything that raises the prices to get solar more in line with proper conventional electricity is a major plus. So, in this case the good guys are … those requesting the tariff.

      Furthermore, keep in mind that we want states like California that have mandated use of solar & wind electricity to pay the big price. And we don’t want them to do more idiotic things in the future like ban gasoline cars as the UK has apparently done.

      Yes, Trump should go ahead and impose the stiff tariff. That tariff is a win win for the US and our cause!

      • In the Sunshine State, solar is causing price spikes because of the impact on the grid:

        https://www.eia.gov/todayinenergy/detail.php?id=32172

        “Comparisons of January through June day-ahead hourly electricity prices over the past three years in the California Independent System Operator (CAISO) energy market suggest a growing premium in certain morning and evening hours relative to midday hours.

        The higher hourly prices in the morning and evening hours reflect a premium for a particular characteristic that not all generators can deliver: the ability to increase output on command.”

      • All tariffs are horrible. Tariffs impoverish the US people and give money to govt. to squander. There are no upsides to tariffs. Tariffs are ultimately paid for only by US consumers. If Suniva cannot stand the heat, let them find others things to do. Tariffs are crony-socialism at its worst. Sadly, The Don Trump thinks tariffs are good for the US. He is horribly, badly mistaken. Very, very sad.

      • Eric says “Solar kills nearly as many birds and bats as wind.”

        Nonsense. My home’s low-E glass windows kill far more birds in one day than my solar panels ever will.
        BTW, you might want to learn the difference between solar photovoltaic and solar thermal.

      • So how do solar panel components contaminate the ground and water ??

        As I recall, silicon is one of the most abundant elements on earth, along with aluminum.

        Seems like it is ashes to ashes; dust to dust.

        How can something that came out of the ground contaminate the ground ??

        G

      • HarryGee July 27, 2017 at 8:41 am

        “All tariffs are horrible. Tariffs impoverish the US people and give money to govt. to squander. There are no upsides to tariffs. Tariffs are ultimately paid for only by US consumers. If Suniva cannot stand the heat, let them find others things to do. Tariffs are crony-socialism at its worst. Sadly, The Don Trump thinks tariffs are good for the US. He is horribly, badly mistaken. Very, very sad.”

        Yeah, lets let in all cheap shit products from other countries, just like Chinese drywall.

    • If US manufacturers can’t compete with “cheap” imported solar panel prices, and even these “Cheap” import panels have to be Taxpayer subsidized (by YOUR friends and neighbors) and still aren’t competitive with readily available domestic energy sources, then it seems that the US manufacturers should try their hand at a different business, where they might be more successful.

      G

      • George,
        Whilst I tend to agree, and suggest sandal design and manufacture as a possible alternative amongst others, there is a possibility of hidden Government subsidies.
        No tax on inward purchases.
        No employment tax if you are in XX Industry
        No congestion charge if . . . . . . the possibilities are effectively limitless.

        Competition is GOOD!

        Unfair competition – can be
        # a drive to overcome
        # totally unfair
        – or somewhere in between.

        Depending on the differences.

        If my guys have to report payroll details every month – and their guys do it only every quarter – it should be ‘liveable with’.
        Less than 0.001% of costs for your bookkeeper’s time

        [Aside – bookkeeper (and derivatives) are believed to be the only words in ‘English’ English with three successive double letters. I don’t know any others.]

        If my guys have to pay a payroll tax of 12% – and their guys don’t – it may be livable with for running a nuclear power station. But if your costs are 90% payroll – another 12% of that (>10% on top) may not be easily ‘liveable with’.
        Although perhaps your property costs are MUCH lower . . . .
        {Not in London – for sure}

        If my guys have to jump through administrative hoops for diversity, for ethnicity, for smokers, and drivers, and . . . and report every week; and also ensure our purchasing is compliant with some imposed legislation [not from Brussels, perchance]; our transportation [Air; Land: Sea] is bearing down on emissions, but improving diversity, [and WE can prove it, ‘cos we have the admin and records, which have been noted, kept, filed, and are retrievable] – and their guys don’t . . . . . . . .
        Is there now an imbalance?

        Fair trade should be exactly that.
        But – realistically, it is not. At all.

        And we need to live with that – before AND after BREXIT.

        And that will, I am sure, be temporarily painful for the UK.

        Auto
        A simple sailor – a bum boatie at heart.
        So – well aware of world trade flows.
        A small advantage can bring big benefits. Oh Yes!

      • Well I live in the dry Brown State of California, which is part of the USA.
        So I have to “withhold” for the feds, 28% of what I’m paid, and another 13 or 14% for the State of California for income tax plus another 9% for sales tax, plus who know how much per gallon of gasoline, and soon and so forth. It’s almost the end of July and I haven’t got to keep a penny for myself yet.
        Tax Freedom Day advances faster than the perihelion of Mercury does.

        g

  2. To add insult to injury, the Chinese solar panels are constructed in plants powered by very dirty coal.

    • So are the USA manufactured ones; although US coal power is a whole lot cleaner than the Chicoms.

      G

      • Dream on george e.! According to Podesta’s Center for American Progress, no less, “China’s new coal-fired power plants are cleaner than anything operating in the United States.” Pivoting from supporting Obama’s pledge to “bankrupt” American coal power to blasting Republicans for criticizing China’s “emission” levels, the Dem’s meme factory shows amazing agility.

        http://www.powermag.com/who-has-the-worlds-most-efficient-coal-power-plant-fleet/

      • “””””….. “China’s new coal-fired power plants are cleaner than anything operating in the United States.” …..”””””

        ….. The USA’s new coal-fired power plants are cleaner than anything operating in China. …..

        g

  3. The whole renewables ‘industry’ is a crony capitalist trainwreck for sure. However, the feds should only apply tariffs to the degree that foreign panel suppliers are found to be dumping their product as well defined in statute.

    The heavily subsidized renewables ‘business’ in the west has been collapsing since day one despite gov largess, so cut off monstrous taxpayer payouts, absolutely, but handle trade issues in a kosher fashion. BTW, reading this, with China apparently flooding the market with cheap panels and even owning US companies that are lined up for subsidies, one comes away with the impression that CAGW indeed Is a Chinese hoax, a deface one anyway!

    Let the competition between electrical sources begin. Give both sides statutary tax deductions from earned income based on legitimate business costs.

    • I don’t agree with that. At all.

      Think of California. They have mandated that something like 70% of electricity come from highly subsidized wind & solar by something like 2025. They need to pay the big price for that bit of insanity so they go back on that.

      In addition, as I noted above, if the most significant source of renewables (solar) is priced much higher, the Democrats and states like California are less likely to ban gasoline cars, the ultimate idiocy. Yes, go forward without reservation with this tariff. There should be zero argument against it from our quarters.

      • Actually California has mandated 100% electric and 100% “renewable” for energy. In California, Hydro-electric is NOT renewable. Probably because the water melons will never allow aging hydro-dams to be replaced or upgraded, or new ones built. Yes it is a limited availability source, but is also the most reliable renewable energy (except wood).

        G

      • Probably because the water melons will never allow aging hydro-dams to be replaced or upgraded, or new ones built.

        Remember that before the Green Energy Loons there were the Green Eco Loons.
        A dam, for any purpose, changes something.
        (Gosh! It might even submerge the three-footed-ferrets habitat!8-)

      • No. Dumping is when the government writes a check to the company to cover some or all of its costs. Some wingnuts in Europe try to claim that the failure of the US to gouge consumers via hefty oil/gasoline taxes constitutes a “subsidy” to certain industries giving them an “unfair advantage”. Morons.

  4. No good guys here. None. Remove all subsidies and they all die.

    So best is to allow foreign import only when a corresponding export is possible. So if the US has a huge trade deficit with China simplest thing is a bonded trade region on the Mexican border, paid for by the Chinese, run by US management, with Mexican labour. The US get the high paying jobs and they don’t use their capital.

    Only hard bit is Mexican corruption.

  5. It asked the government to establish a minimum price of 78 cents a watt on panels produced anywhere outside the U.S. to keep companies from circumventing the penalties. That’s more than double the average of 35 cents a watt that prevailed before the recent price run-up.

    Thirty-five cents per peak watt … if I could buy panels at that price I would buy a kw or so (if I lived in the country, which I don’t). In Ontario (Canada) where I currently reside, electricity prices are getting ridiculous.

    My hydro bills for the winter are very close to $1000.00 per month, granted I do have forced air electric heat. My condo in Florida runs hydro 24/7 fridge, air conditioner 1/4 the size of my house and my bill per month is $32.00 US. What the hell is going on here? Something has to be done. Shut Hydro one down , invite some American competition and kick the Wynn government out to Tin-buck-two!!! link

    The above person heats with electricity. That’s nuts, especially for someone living in a rural area where the delivery charges can exceed the price of the electricity.

    I sure wouldn’t heat with electricity, and it’s worse for folks living in the country. If I could get panels at thirty-five cents a peak watt, I would consider solar. (Yes, I do realize that there are lots of other costs.)

    • Heating with electricity made its debut in the “nuclear energy to cheap to meter” era. It especially doesn’t make sense in northern climes. A small space heater under you desk to warm the toes for a couple of hours may be OK, Whole house heating never made sense economically. It makes even less sense than it did during years when the electric companies used heating discounts to with load balancing.

      Convert to gas or even oil heat. The newer models are 95% or better at converting fuel to heat. Way better than fossil fuel electric.

      • I have owned two all electric homes. Both used heat pumps, air-to-air in the south, and ground water in the north. Both are quite competitive with gas heat for total utility cost.

    • Taking one of the highest quality forms of energy (Electricity) and converting it to the very garbage of the energy spectrum; HEAT (noun), (where energy goes to die). should be a Federal Felony offense.

      G

  6. My objections to solar are twofold: 1) the bad effect that occurs when the grid allows solar power unlimited entry onto the grid and 2) the policies that pay the solar roof owner retail prices for the power they put onto the grid. In the vcase of 1 above, when solar power is allowed priority ,then reliable power generation plants must ramp down, which lowers their capacity and therefore increases their cost per unit (kWhr) , which is paid for primarily by non-solar customers. And 2 above is ridiculous – solar power has very little value compared to reliable power. Utilities should stop net metering and not allow solar ,or any other uncontrollable, power onto the grid. If solar roof owners want to get full use of their panel output, let them buy batteries,as Elon Musk is recommending (naturally, bought from a Musk-owned company). Solar panel owners are already getting massive subsidies (they fund the cost of the panels and then some). There is no reason they should continue to get “subsidies” from non-solar panel customers for the lifespan of the solar roof. Solar is a gigantic ripoff of the non-solar consumer.

    • The government incentives should be given only to those who go off-grid.

      There should be no purchase of excess energy produced at enhanced rates. instead the home owner should be forced to store that energy for use when the sun is not shinning.

    • One of the oft cited benefits of solar is that it is available at times of peak consumption. As such, properly done, it should have a stabilizing effect on the grid.

      Coming into my house we have an extra wire. It’s for the utility to control a hot water heater and take it off line at hours of peak consumption. So the concept of the electricity provider controlling something at my house has been around since the 1940s. They’re doing it differently now.

      The technology exists to control when PV systems are allowed to feed into the grid. In fact, the capabilities of smart inverters go well beyond that. link The only problem is for the utilities to get their act together and use what is easily available.

      • “One of the oft cited benefits of solar is that it is available at times of peak consumption.”

        I take it you are living somewhere south (southern California?). Further north peak consumption is usually on winter nights, which isn’t exactly optimal for solar.

      • Precisely. Our politicians are just plain dumb.

        In Northern Europe peak consumption is around 6 to 7 pm in winter. Not a lot of sun then!

        Solar might have a role to play in the Middle East where peak demand is midday July and August, but not in cloudy mid to high Northern latitude countries.

    • Arthur, quite right. Why should any energy source be given a subsidy. But subsidies are just about all that govts. can do, otherwise they are out of business.

    • Then surely you would be against the massive subsidies that renewables receive as well, especially in places like Kalifornia.

    • A further interesting also from Mr. Stokes’ Wiki link:

      Bastiat’s most famous work, however, is The Law,[10] originally published as a pamphlet in 1850. It defines, through development, a just system of laws and then demonstrates how such law facilitates a free society.

      In The Law, he wrote that everyone has a right to protect “his person, his liberty, and his property”. The State should be only a “substitution of a common force for individual forces” to defend this right. “Justice” (defense of one’s life, liberty, property) has precise limits, but if government power extends further, into philanthropic endeavors, government becomes so limitless that it can grow endlessly. The resulting statism is “based on this triple hypothesis: the total inertness of mankind, the omnipotence of the law, and the infallibility of the legislator.” The public then becomes socially-engineered by the legislator and must bend to the legislators’ will “like the clay to the potter”:

  7. An unbiased economic analysis would lean heavily against the tarrif. However, there are at least two reasons to support Suniva…

    The vast majority of CSPVs installed in projects in the US are imported. The tariffs and minimum price levels requested by Suniva would have a devastating impact on future installations of solar panels during the four year relief period requested by the petitioner. Although SolarWorld Americas joined Suniva as a co-petitioner, Suniva faces a lonely fight as it will be confronted by a literal army of installers, developers, renewables tax credit investors, attorneys general from states with significant renewable portfolio standards (that would be negatively impacted by additional tariffs and minimum prices), and utilities planning to meet renewable portfolio standards through owned or contracted solar projects. To name a few parties in opposition.

    https://seekingalpha.com/article/4089004-steel-tariff-case-provide-insight-suniva-201-action

    “Suniva faces a lonely fight as it will be confronted by… renewables tax credit investors, attorneys general from states with significant renewable portfolio standards (that would be negatively impacted by additional tariffs and minimum prices), and utilities planning to meet renewable portfolio standards through owned or contracted solar projects”

    The tarrif is opposed by 1) corporate welfare “invsetors” and 2) States dependent on corporate welfare “investors.”

  8. If the EU really believed in Climate Change, they would not impose high tariffs on the importation of Chinese Solar panels.

    If Climate Change is truly the biggest threat we face, the EU would welcome the importation of cheap Chinese solar panels so that as many EU citizens as possible could afford to go solar.

    The imposition of Tariffs on cheap solar panels is one fact that proves that Governments are not seriously concerned about Climate Change and do not consider that it is the greatest threat that we face today.

    • …Governments are not seriously concerned about.Climate Change and do not consider that it is the greatest threat that we face today.

      A threat? No. The greatest opportunity.

  9. So, stealing tax payer’s money makes them “economy’s brightest stars.” ? Isn’t that special! Place this tariff then strip away all the tax money subsidies. We will see who sinks and who swims in all this craptacular “industry”.

  10. Creating customs barriers to protect local producers is usually regarded as economically illiterate.

    To do so knowing that the major outcome and motivation is to protect the use of fossil fuels is effectively a fossil fuel subsidy – or from a different perspective a PV surcharge.

    PV and wind power have some clear issues in terms of reliable generation and storage requirements which need to be solved. But creating protectionist tariff barriers runs utterly counter to a free market culture and economy which in years past would have been regarded as anti-American

    • buying goods from countries where they are overtly subsidized(includes China) and covertly subsidized through poor pay and poor working conditions, uncontrolled pollution from minerals extraction, and other “cost” reductions is perfectly reasonable but it is not economically illiterate to protect against antieconmonic trade practices.

      Adding tariffs to support overly generous wages, restricting employment by any means to push up employment, and providing subsidies to support unnecessary capacity are also economically illiterate, counter free market, and anti-American.

  11. With all the talk of renewables and ban on petrol/diesel cars and how we will all go EV, the following brief demonstration of the Mercedes offering 9the double AA Class) should give a laugh.

  12. “U.S. solar companies are snapping up cheap imported solar panels ahead of a trade decision by the Trump administration that could drive up costs and cloud the fortunes of one of the economy’s brightest stars.”
    The “brightest star” of the industry at the expense of the general public and their tax credits.
    If it were not for crying, one would have to laugh about it. About so much stupidity a la Sovjetunion. There everything was “the brightest star”, but also at the expense of the general public and on the trip to bankruptcy.

    • Thus the need for a carbon tax, so we can re-distribute to the poor, so they can afford more AA batteries for their Mercedes. Yeah, better go with /sarc.

  13. 40 years ago, I always thought solar would be a good idea. So Solar City came out to talk about putting “free” panels on the house. I said, great. If the power goes out, I’ll have lights and maybe more. They said uh… no… If the grid goes down, your solar would not work. What if I got one of those battery systems Tessla is working on. They said, I could do it,it would cost a small fortune, but still, if the grid was down, I was SOL.
    Really?

    I can get a generator with a transfer switch to power the house yet protect the linemen working.
    Then they were talking about a situation where if I sold the house, the new owners would have to sign for the “deal” Solar City had attached to the house. That would be an attractive package to a buyer. Not if they can read. Or I could pay for Solar City to take the panels off.

    And if (when) Solar City goes under and the contracts are bought up, what is to prevent the contracts from changing dramatically?

    The thought of being dark and cold, yet having electricity being wasted on my roof was way beyond my acceptance level. Then the finances of Solar City – they will never allow one to make enough electricity to be worthwhile. Free panels that are functionally and financially a bad idea, and a waste. My little Honda genny keeps my household running.

    And now, here we are. The government wants us with solar panels. They want the installers to work. Solar panels are relatively cheap, allegedly because of their govt. subsidies and “dumping”. Do we want to protect out non-existent solar panel industry (killed by the cheap, dumped panels), protect the steel industry, and raise costs to the consumer, causing people to rethink buying into the solar dream, or would we rather keep installer people working, be “green”, and get more panels on roofs? Where’s Solomon when you need him?

    • fxk, someone lied to you.

      For some reason solar vendors don’t like to talk about using the panels when the grid is down. I’m not clear on why this is, but I’ve encountered the same idiotic story from three different vendors, all pretty well known. It’s just pure nonsense. You do need batteries and unless you want to buy a whole lot of them you’ll need to add a generator also, but it doesn’t break the bank. An 9 cell lead/acid battery nank duns about $4000. A 15KW propane generator is about $12,000. My system will run indefinitely off grid, using solar when the sun is up then switching to batteries at sunset. After about 4 hours of battery operation the cells hit 50% state of charge, the controllers switch to the generator for a couple of hours, then back to batteries when they get back up to 96% SOC. Repeat as needed until sunrise. My systems been running for 10 years. I was once off grid for 4 weeks during an extended outage after a big storm. It works just fine.

      • “For some reason solar vendors don’t like to talk about using the panels when the grid is down.”

        I’m sure you know this, but it’s required that all grid based inverters employ “anti-islanding” features. They must stop exporting power to the grid when the grid fails. It’s to protect the linesman. It appears in Bartleby’s case, you’re connected through an anti-islanding device? And that extra $16K of hardware is the reason they don’t push for solar operation during that 0.1% of the time where there is grid loss.

    • One of he reasons they are free; besides Solar City getting the Taxpayer subsidies instead of you is that if you had to pay for them, you would start asking what their efficiency is, and then you would never buy them. So solar city doesn’t care how inefficient they are they are going to charge you for what little electricity you do get from them.

      You should rent them your roof space on the basis of one KW/m^2 of solar energy impinging on your roof, and let SC worry about the efficiency.

      G

  14. Why Trump picked Rick Perry for DOE still blows my mind. Perry needs to go as well.

    Energy Sec’y Rick Perry Expertly Trolls Trump On Wind Power As New Grid Study Looms

    https://cleantechnica.com/2017/07/19/energy-secy-rick-perry-expertly-tro

    …Unlike his counterpart Scott Pruitt over at the Environmental Protection Agency, Perry has been steadily building on policies established under the Obama Administration…A leaked memo about the study set the renewable energy industry on fire, and the American Petroleum Institute also pushed back on behalf of natural gas stakeholders.*

  15. Suniva just needs to move their operations to California. Then add CA’s inflated costs of doing business to their products and have CA pass legislation where the state pays a subsidy directly to Suniva whereas the cost of Suniva products are equivalent to those imported. CA is doing something similar for Tesla. CA can then legislate more solar requirements to show what a success the subsidy is. Er … wait a minute, that would increase the costs of the subsidy. No problem, just tax the manufacturer for the costs of the subsidy. Yea … that’s the ticket.

  16. I consulted for a few solar / photovoltaic places as side gigs and ‘tweeners. Including ECD. Yeah, that one. As well as ARCOsolar, Exxon Enterprises. Plus others. I’m not sure where we lost the trail here in the US. There is not a major advantage to making wafers in China vs here. Granted, the downstream packaging and integration steps are cheaper in China, but the trade off is a terrible supply chain management situation, plus the unavoidable logistics costs / material tied up. Still, the overall China price is less, when you add it all up. RE: environmental effects – it’s not the silicon, It’s the photoresist strippers, other solvents, certain aqueous reagents. Some of the metals and other things we deposit on the wafers, when removed or otherwise included in the gaseous effluents from sputtering/evaporation/CVD/etc, or, via aqueous processes, can also be trouble. Lots more here but at that point I’d truly descend into geekery.

    • These days there are also other substrates besides the classic Si (or other semicon) wafers. Similar issues though.

      • Do any of those others have the same efficiency as silicon wafers; say 24% or so ??

        G

  17. Just eliminate the mandated purchase agreements, net metering rules, “carbon taxes”, etc as well as outright subsidies, and let the solar industry find its own real level.

  18. Solar can work in the correct situation. I have a system like Bartleby described in a previous cmment. Mine is a 2.75 kW panel array, a 15 kW Generac propane primary power generator, an ancient inverter, and 20 6 v golf cart barreries. I’m totally off the grid because the grid ends over a mile from my place and it would cost $10+ per foot to run the underground powerline to the house through a State Forest.

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