10 Oct Solar Panel Pricing Going Up in 2018 – Solar 201 Trade Case
The solar industry has really taken off.
It’s a common occurrence to see solar all over town where as just a decade ago, it was rare to see a system in a neighborhood.
Since 2009, we’ve seen the cost of materials drop significantly, enabling thousands of people to go solar while creating jobs all over the country (the US Solar Industry employs 260,000 Americans-38,000 of which are manufacturing jobs). We’ve seen a shift away from fossil-fuels as well.
There are two companies that have not fared well in this booming market, though: Suniva and SolarWorld and their recent actions are threatening our entire industry.
When we say that panel prices are likely to rise in 2018, it’s serious.
Here’s what’s causing the commotion:
Suniva and SolarWorld are solar panel manufacturers here in the US who, despite numerous tax subsidies (Suniva received more than $20 million in tax credits before going bankrupt. SolarWorld was given over $100 million before filing for insolvency this April) have not found success.
Despite all of the tax credits, they’re both bankrupt.
Suniva and SolarWorld are foreign-owned companies and together, they employ around 500 Americans (see the highlights below for more details).
Since claiming insolvency this past Spring, they leapt into action filing a petition with the US International Trade Commission (ITC), calling upon a rarely-used provision in trade cases called Section 201. Many in the industry refer to it as Solar 201 Trade Case.
This action has the potential to seriously disrupt the solar industry as a whole.
We’re most definitely concerned about the petition- it’s a hot topic of discussion every day.
Section 201 was created to protect our domestic industries that have been seriously injured or threatened by an increase in imports. If the ITC determines that an industry in the US has, in fact, been seriously harmed, they send a recommendation of tariffs to the President. Then it’s up to him to determine if we move forward with the suggested tariffs.
Suniva and SolarWorld claim that the imports coming in from Southeast Asia have caused grievous injury to the solar industry and therefore, new CSPV cell import tariffs must be put in place.
But their claim simply isn’t accurate.
The imports may have affected their ability price their panels competitively for this market, but the US solar industry as a whole is booming.
- In April, Suniva filed to reorganize under Chapter 11 bankruptcy.
- A few days after the bankruptcy announcement, Suniva filed its petition with the ITC (United States International Trade Commission), and invoked a little-used provision in trade cases called Section 201. Rather than basing a complaint against a specific country, Section 201 cases look to determine if a “global safeguard” is warranted.
- SolarWorld has since joined Suniva as a co-petitioner in this case.
- Suniva claims that a flood of inexpensive imports from Southeast Asia, including China, have created products so inexpensively that it’s causing them to go bankrupt, effectively shutting down solar panel manufacturing in the US and that a global tariff needs to be imposed.
- Ironically, Suniva is largely owned by a panel maker based in Hong Kong, Shunfeng International Clean Energy, which bought nearly a two-thirds stake in the company in 2015. SQN Financial, which is keeping Suniva afloat during this trade case, requested over $50 million from the Chinese to ‘kill this case’.
- SolarWorld is a German company and one of their largest shareholders is a Qatari investment firm.
- Between the two companies, they employ around 500 Americans.
- Manufacturers in other parts of the solar sector across the U.S., such as racking systems, have been adding jobs.
- The U.S. solar industry employs 260,000 Americans. This petition puts these jobs at risk and if successful, 88,000 jobs will be lost nationwide, including 6,300 jobs in Texas, 4,700 in North Carolina and a whopping 7,000 jobs in South Carolina. People who build racking systems, trackers, steel, electronics and more are at risk because of this case.
- We hate to see anyone lose their job, but 500 workers at these plants do not accurately represent the interests of our industry as a whole.
- Twenty-seven solar mounting equipment manufacturers and their domestic suppliers wrote a letter to the U.S. International Trade Commission to express their opposition to the Section 201 trade case. They have experienced strong growth as a result of the American solar industry’s upward trajectory. But now, they say their companies and the jobs they support are at risk.
- Should the ITC find that substantial injury has occurred primarily as a result of imports, the Commission will then enter the second phase (determination of remedy) with a recommendation for action delivered to President Trump no later than Nov. 13. If he determines to move forward with these new tariffs, we can expect to see the cost of solar panels rise in 2018.
- The last time a president accepted a Section 201 recommendation from the ITC was in March 2002 when George W. Bush imposed a tariff on steel. He lifted the tariff in December 2003. The unintended consequence of that action? 200,000 Americans lost their jobs to higher steel prices during 2002. These lost jobs represent approximately $4 billion in lost wages from February to November 2002. See the job study TRADE PARTNERSHIP WORLDWIDE, LLC The Unintended Consequences of U.S. Steel Import Tariffs: A Quantification of the Impact During 2002 http://www.tradepartnership.com/pdf_files/2002jobstudy.pdf