By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on September 25, 2017.
Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.
When ‘America First’ meets American solar energy
The plot thickens in the Suniva and SolarWorld case before the International Trade Commission.
On Friday, the U.S. International Trade Commission ruled that imported solar panels and modules are causing serious injury to U.S. manufacturers, giving the president the final say about tariffs in this high-profile case that could unravel the American solar industry.
Parties on both sides claimed that a vote in favor (or one against) could devastate the rooftop solar industry.
Section 201 of the 1974 Trade Act refers to global safeguard investigations and is an infrequently used measure that allows a petition to be filed when domestic manufacturers assert serious injury to their industry due to an influx of foreign imports. After an investigation and finding of injury, the act authorizes the president to intervene.
U.S. solar crystalline silicon photovoltaic manufacturers Suniva and SolarWorld have declared that competition from cheap imports is adversely affecting the industry here in America. The companies cite their recent bankruptcy filing and the failure of other solar manufacturers across the country in recent years as their proof.
But the industry’s trade group, Solar Energy Industries Association, also suggests that as many as 88,000 U.S. jobs – many of them solar manufacturers and installers – could be lost if the imported panels face higher tariffs, and thus were to raise the cost to Americans for solar energy. What’s more, while each has a presence in the U.S., Suniva and SolarWorld are both foreign-owned companies arguing for the American market.
So why does it matter? Power generated by solar energy has increased significantly as a viable option due in part to how cheap solar energy is becoming. This fast-moving downward cost trajectory is due to significant improvements in the technologies and also less-expensive, imported panels. It follows naturally that cheaper imports have allowed the installation side of the industry to flourish as the investments make more sense for individuals and companies to install solar on their homes and businesses. If the petitioners are granted the increased tariffs, the cost of solar panels is projected to more than double.
A remedy hearing will be held at which the commission will issue recommendations to the president. The act empowers the president to deal with those recommendations as he sees fit, including the liberty to make them more severe, less so, or not implement them at all. This fact has solar industry stakeholders paying close attention given the president’s repeated threats to increase tariffs on Chinese imports both as a way to improve U.S. manufacturing, and to bolster the coal industry by diminishing renewable energies strong growth in America.
It will be November before we know what the proposed remedy will look like. Stay tuned to see if Chinese solar panels prove to be the “tariff silver platter” the president has been requesting. While punishing cheaper imports may be an “America First” argument for manufacturers, in this instance it appears it could be the opposite effect for American consumers.
Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.