A White House decision to impose initial 30 per cent tariffs on imports of solar photovoltaic cells and module has met with a mixed response, with one US trade group saying it will cause the loss of 23,000 jobs in the country.
The Office of the US Trade Representative (USTR) announced that President Trump had approved recommendations to impose the tariffs, following a US International Trade Commission (USITC) investigation that found evidence of “serious injury” to domestic manufacturers from foreign imports of PV cells and modules.
“These cases were filed by American businesses and thoroughly litigated at the International Trade Commission over a period of several months,” said trade ambassador Robert Lighthizer in a USTR release, referencing complaints by the US division of German cell maker SolarWorld and Atlanta-based Suniva about the claimed state subsidization of cheaper cells and modules made by Chinese rivals, in a row that dates all the way back to 2011. In 2012, the Obama administration made a similar decision in its preliminary ruling on so-called "dumping" activity by Chinese PV firms.
Tapering tariffs
According to a USTR fact sheet, the “remedies” imposed will see an import tariff of 30 per cent applied in the first year, dropping to 25 per cent in the second year, 20 per cent in the third year, and 15 per cent in the fourth year.
However, the first 2.5 GW of imported solar cells will be exempted from the tariff in each of those four years. To put that figure in context, the US as a whole installed just over 2 GW of solar PV in the third quarter of 2017.
According to a joint report by Greentech Media Research and the Solar Energy Industries Association, around 11.8 GW will have been added to the US grid in 2017, a forecast revised down from 12.4 GW by the analyst team as a result of the ITC case - suggesting that around 10 GW of imports could be affected by the tariff each year, assuming the market does not continue to shrink.
Commenting on that revised forecast last month, SEIA president Abigail Ross Hopper said: “The solar industry is a resilient bunch, but this quarter shows us what happens when policy uncertainty becomes a disruptive factor: prices rise, supplies shift and the market reacts accordingly.”
And just last week she sent a letter to Trump and other top officials pleading that they reject the imposition of high tariffs because of the impact that such a decision would have on US jobs in solar installation and manufacturing of associated components such as racking systems, inverters, and trackers.
“A decision to impose high tariffs in line with the International Trade Commission’s recommendation will lead to the layoff of tens of thousands of workers, cause companies to stop investing in the United States and bring an American economic engine screeching to a halt,” Hopper wrote.
In the letter she also claimed that the US solar sector accounts for some 260,000 jobs, most of which are relatively low-skilled and do not require a college education.
Blue-collar jobs
Responding to the ITC recommendations and White House decision after the USTR announcement, the SEIA estimated that although the level of the tariffs was much lower than complainants SolarWorld and Suniva had wanted, they would still cause the loss of 23,000 jobs.
“While tariffs in this case will not create adequate cell or module manufacturing to meet US demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” said Hopper.
The SEIA release responding to the USTR announcement included a quote from Tony Cifford, chief development officer at PV projects firm Standard Solar saying: “It boggles my mind that this president - any president, really - would voluntarily choose to damage one of the fastest-growing segments of our economy.”
He added: “This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout.”
SEIA reckons that of the 38,000 people estimated to have been employed in solar-related manufacturing in the US as of December 2016, only 2000 were involved in making cells and panels. The vast majority instead produce auxiliary technology including inverters, trackers, racks and electrical systems.
‘Hard work’
Unsurprisingly, SolarWorld reacted rather differently. Juergen Stein, the CEO of its US division, said in a release from the Bonn-headquartered firm that he appreciated the “hard work of President Trump, the US Trade Representative, and this administration in reaching today’s decision”.
He also welcomed their recognition of the importance of solar manufacturing to the US economy and, curiously, national security.
“We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the US,” Stein added.
But Hopper concluded: “While we believe the decision will be significantly harmful to our industry and the economy, we appreciate that the president and the administration listened to our arguments.
“Our industry will emerge from this. The case for solar energy is just too strong to be held down for long, but the severe near-term impacts of these tariffs are unfortunate and avoidable.”
