The import of cheap solar photovoltaic (PV) panels has harmed two solar energy firms, a US International Trade Commission investigation into the matter has found. The vote was unanimous apparently, with all four voting commissioners backing the ruling. That said, there is a lot more context that puts the case into broader context … and shames the solar companies that brought the suit.
Notably, practically every solar company in the US opposed the case brought by two “domestic” solar energy firms, and those firms are actually owned by German and Chinese companies. In the case of the latter, the parent company in China opposes the case brought by its bankrupt US subsidiary.
Nonetheless, with the ruling made, US President Donald Trump is now in the position to impose tariffs on imports as a means of protecting US solar PV panel manufacturers, if he so chooses.
Georgia-based solar PV manufacturer Suniva — the bankrupt firm responsible for getting the process going with a complaint back in April — would no doubt like it if action were to be taken, but it’s not clear yet what Trump intends.
Considering the bellicose tone taken by the US President with regard to some of the trade practices used by China, it doesn’t seem too unlikely that some sort of action will be taken. If action is taken, it could of course be intentionally ineffective and mostly for theatrical value — which would mean no major changes on the ground. We’ll have to wait to see what happens.
All of that said, it’s also important to realize that this trade case doesn’t contend foreign manufacturers did anything wrong. It just contends that the US companies in question were hurt by foreign imports.
Reuters provides more: “The outcome was a sharp blow to the solar installation industry, which strongly opposed Suniva’s petition on the grounds that it would drive up the price of solar power just as it is becoming competitive with electricity generated from fossil fuels.
“The Solar Energy Industries Association (SEIA) trade group lobbied heavily against the petition, and on Friday vowed to be ‘front and center’ in the remedy process. SEIA has warned that the solar industry would lose 88,000 jobs, or one-third of its workforce, if the hefty protections Suniva proposed in its petition are implemented.
“… Under the rare Section 201 trade case, Trump will make a final decision on whether to provide relief to US manufacturers, and, if so, what type. The ITC will deliver its recommendations to Trump by November 13. He could accept them, choose to implement something else entirely, or do nothing.”
As a reminder here, US solar panel manufacturing capacity currently represents only around 2% of total global production capacity. Additionally, the vast majority of solar jobs in the US relate to installation, not production. If action is taken, then I suppose that firms with US-based manufacturing, such as Tesla, stand to benefit quite a bit. You’ll recall that production of Tesla’s solar roof product has now begun at its new facility in Buffalo, New York.
Our sister site CleanTechnica provides more context on the case, its odd origins, this uncommon trade law avenue, and the unusual situation in which a parent company opposes a case brought by one of its subsidiaries:
But patriotism was hardly the motive — as the Washington Post noted, “While US based, Solar World Americas is owned by a German firm and a majority of Suniva is owned by Shunfeng International Clean Energy, a Chinese company which has opposed the petition filed by Suniva’s restructuring officer …
“Suniva’s petition was filed by SQN Capital Management, a New York-based investment firm which lent Suniva money to purchase equipment and which is Suniva’s largest creditor. In a May letter to the China Chamber of Commerce for Import & Export of Machinery & Electronic Products, SQN offered to drop the trade petition if it were paid about $52 million to cover its debts to Suniva.”
It’s even more chicken-feed than that. SQN demanded that Suniva file the case in order to get a mere $4 million loan to see it through the restructuring.
And as Bloomberg points out, these kind of cases fell out of favor because most Presidents weren’t rash or stupid enough to impose tariiffs:
“The case is unusual — and not just because Suniva’s majority owner, Shunfeng International Clean Energy Ltd., opposes it. It also was pursued under a rarely used provision of a trade law that offers companies a ‘global safeguard’ that can result in broad, uniform protection against imports — not just tariffs on specific countries or companies. Under that 1974 trade measure, Suniva only had to prove that imports have caused it ‘serious injury’ — not that foreign competitors did anything unfair or illegal. … Even when the ITC sided with domestic manufacturers, presidents were often unlikely to impose a penalty. These cases have had a resurgence under Trump, whose protectionist rhetoric may be leading companies to think he’ll support tariffs or import quotas.
So, a $29 billion industry may be destroyed because one greedy lender was trying to squeeze a few extra bucks out of a bad investment. Welcome to the madness that is America in the age of Trump.