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.
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.