Solar Tariff Case May Throw Shade on Growing Solar Industry

By Lev Blumenstein, Energy Fellow

Department of Energy

In April, the United States International Trade Commission began an investigation under section 201 the Trade Act of 1974 into whether U.S. manufacturers of crystalline silicon photovoltaic (CSPV) cells were being harmed by imports of cheap solar panels. CSPV cells and panels are the most common commercially available type of solar cells and panels. The impetus for the investigation was a petition filed by Suniva. The company, which manufactures CSPVs cells in the United States, filed for bankruptcy shortly before filing its petition. In May, SolarWorld, another U.S. manufacturer, joined Suniva’s petition. On September 22, 2017, the Commission unanimously found that the two manufacturers were harmed by imports of cheap solar panels.

The Commission’s next step is to determine possible trade remedies. The remedies sought by Suniva would double the cost of imported CSPV cells and panels. The Commission is scheduled to present its findings and recommendations to President Trump by November 13, 2017. The Trump Administration will then have sixty days to issue a final decision.

This represents one of the Administration’s first opportunities to put its protectionist tariff rhetoric into practice. The Administration should think long and hard before reflexively imposing tariffs that would double the cost of CSPV cells and panels. This decision, like most decisions involving international trade, does not fall neatly into a United States vs. the World dichotomy. Nor does this issue neatly divide the solar industry between manufacturers and installers. Opposition to the tariffs cuts across partisan and sectoral lines. Numerous manufacturers, utility holding companies, and even the American Legislative Exchange Council have declared their opposition to the complaint filed by Suniva and SolarWorld.

Over the past several years, the American energy industry has undergone large shifts. The solar industry employs an estimated 373,807 people in the United States. That is twice as many jobs as the coal industry and roughly equal with the entire natural gas industry. Two percent of all new jobs in the United States are in the solar industry. Over 50% of those jobs involve the installation and repair of solar panels. Solar manufacturing employs about 15% of solar related jobs. An analysis by Greentech Media estimates that the increased cost of CSPV cell and panels would reduce the amount of solar installed in the United States by over half. The solar industry estimates that such a reduction in demand would cost the American economy 88,000 jobs.

President Trump has expressed a strong desire to impose taxes on foreign goods and promote American energy. However, imposing the tariffs sought by Suniva and SolarWorld would result in immediate harm to American workers, including many from states that voted for him. He should exercise his authority and decline to impose the sought after tariffs.