Trade Decision Roils U.S. Solar Industry
September 22 2017 - 7:08PM
Dow Jones News
By Erin Ailworth
Trade protection for U.S. solar panel makers could be a boon for
the few domestic manufacturers left in the country, but a drag for
the companies that install and sell solar systems to homeowners,
businesses and utilities, which worry that it would lead to higher
prices for consumers.
The U.S. International Trade Commission on Friday voted 4-0 to
support trade barriers restricting solar panel imports. The
decision came after two embattled panel makers, Suniva Inc. and
SolarWorld Americas Inc., petitioned for a tariff on imported solar
cells, the piece of equipment in a solar panel that converts
sunlight into electricity.
The case divided the U.S. solar industry, with some panel makers
arguing they needed protections against a flood of underpriced
imports, and panel installers and others countering that a tariff
would raise prices for American consumers, who bought more solar
power arrays after cheap imports made them more affordable.
Both sides claim jobs are on the line.
Suniva and SolarWorld predict that trade protections would boost
domestic manufacturing and force foreign competitors to open plants
in the U.S., creating more than 100,000 jobs across the solar
industry.
But the Solar Energy Industries Association, a trade group
representing the majority of the solar industry that opposed the
proposed tariff, forecasts that more expensive solar panels would
hurt demand and cause the sector to shed 88,000 jobs
nationwide.
Exactly how it all shakes out depends on what kind of trade
protections, if any, the Trump administration enacts. The ITC will
forward its recommendations to the White House by mid-November, and
the Trump administration will then have two months to make a
decision.
"We welcome this important step toward securing relief from a
surge of imports that idled and shuttered dozens of factories,
leaving thousands of workers without jobs," said Juergen Stein,
chief executive of SolarWorld Americas, an Oregon-based firm whose
German parent filed for insolvency earlier this year.
Abigail Ross Hopper, chief executive of the Solar Energy
Industries Association, said her group will continue to fight the
tariff.
"Any remedy that hampers the growth of the solar industry is not
one that we ever would support," she said.
Some solar installers were dismayed, including Sunrun Inc.,
which called the ITC vote an "unfortunate decision."
"If the Trade Commission recommends quotas or tariffs on solar
cells and modules, they will be putting America's 260,000 solar
jobs -- which cannot be exported or automated -- in jeopardy," said
Sunrun co-founder Ed Fenster.
Tesla Inc., which owns solar installer SolarCity, said it
remains committed to expanding its solar manufacturing capabilities
in the U.S., with or without trade action.
Jeffrey Osborne, an analyst with Cowen, said he expects solar
demand would take a hit if trade restrictions are enacted -- though
just how much of one depends on the details. Any tariff that raises
solar panel prices above 50 cents a watt, he said, would put
pressure on the entire market.
While foreign solar manufacturers have been talking about
opening plants in the U.S. if the Trump administration imposed
protections, Mr. Osborne said, he questioned how many would do so
given that any trade action is likely to be challenged at the World
Trade Organization.
It would take at least a year to build a plant, he added, and a
few more to recoup that investment, especially given that higher
labor and energy costs make it more expensive, by about 3 to 5
cents per watt, to make a solar cell in the U.S. than in Asia.
"I don't think people are going to the drawing board tomorrow
and start building a factory," Mr. Osborne said.
Write to Erin Ailworth at Erin.Ailworth@wsj.com
(END) Dow Jones Newswires
September 22, 2017 18:53 ET (22:53 GMT)
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