Solar Sector Fears WTO Ruling Against Tariffs Won’t Save The U.S. From Itself
BY: MICHAEL PUTTRE
SOLAR INDUSTRY MAGAZINE
July 22, 2014
Last week, a panel of judges from the World Trade Organization (WTO) declared that the U.S. imposition of tariffs on China-source solar photovoltaic products is a violation of international trade rules. Nobody expects the WTO ruling to have much of an impact on U.S. trade policy, however, and this has a lot of people in the solar sector very worried.
The main concern is that the attendant price increases on PV products whose wafers or cells originate in China-source factories will bring the primary impetus for the solar sector’s growth to a screeching halt, just when the 30% investment tax credit (ITC) expires at the end of 2016 and such momentum is needed.
“If we lose the ITC and are not cost-competitive in a good part of the country, we are in deep trouble,” says Tony Clifford, CEO of Standard Solar, a Maryland-based developer of commercial solar projects.
U.S. tariffs on Chinese solar panels break trade rules, WTO says
BY: JOHN UPTON
July 14, 2014
When it comes to global trade in solar panels and components, the U.S. trade representative wants to have his suncake and eat it too. Even as the trade rep has been hauling India before the World Trade Organization, complaining that the country’s requirements for domestically produced solar panels violate global trade rules, the U.S. has been imposing new duties on panels imported from China and Taiwan. By some estimates, the U.S. duties could increase solar module costs in the country by 14 percent.
On Monday, WTO judges who were mulling China’s complaint against the U.S. over its duties on solar panels and steel ruled in favor of — you guessed it — more world trade. Reuters reports:
In the $7.2 billion Chinese case, the panel found that Washington had overstepped the mark in justifying the so-called countervailing duties it imposed as a response to alleged subsidies to exporting firms by China’s government. …
And it told the United States it should adapt its measures to bring them into line with the WTO’s agreement on subsidies and countervailing measures.
The Coalition for Affordable Energy, a trade group, cheered the ruling. It primarily represents solar panel installers, not solar panel manufacturers, so it supports lower-cost panels — regardless of where they are made. “Today’s WTO announcement and the broader trade dispute should prompt the Obama Administration to reconsider the wisdom of additional solar tariffs,” CASE President Jigar Shah said in a press statement.
Green goods trade agreement will not affect US solar tariffs: CASE
BY: JOHN PARNELL
July 10, 2014
Negotiations to remove customs and excise tariffs on green goods, including solar cells and modules, will not solve existing anti-dumping actions, a US lobby group has warned.
The Coalition for Affordable Solar Energy (CASE) welcomed the start of talks earlier this week on the Environmental Goods Trade Agreement that will remove barriers on an estimate US$1 trillion of annual trade.
Later this month, the US Department of Commerce will give its preliminary verdict in an anti-dumping case brought against Chinese modules with components manufactured outside China. The preliminary anti-subsidy findings were delivered in June.
“While we would welcome a broad trade agreement on environmental goods, it does not address the current countervailing duty and anti-dumping solar trade cases at the department of commerce,” said CASE president Jigar Shah.
“Policymakers must not lose sight of the immediate harm to the American solar industry caused by new preliminary countervailing duties, which are raising module prices by 14%, jeopardising projects across the country and slowing job growth. For the more than 145,000 US solar workers, it remains critical that the Obama administration engage on this issue and convene negotiations toward a resolution acceptable to all sectors of the thriving US solar industry.”
CASE member op-ed: Tariffs raise the price of solar power
BY: OCEAN YUAN
June 27, 2014
Would you choose to make solar energy more expensive and harder to deploy?
It seems a no-brainer that our government and politicians should support policies that do not threaten the growth of solar power – a clean and renewable source of energy that employs more than 145,000 Americans.
But, instead, the solar industry is hamstrung by trade complaints filed with the U.S. International Trade Commission and Department of Commerce that are raising solar prices across the country. The petitioner, SolarWorld, is a German-owned company that operates a facility here in Oregon and seeks increased tariffs on solar products imported from China, as well as an expansion of tariffs to include products from Taiwan.
At the beginning of June, the Department of Commerce released a preliminary determination in SolarWorld’s favor and began collecting countervailing duties as high as 35 percent on imports of solar products. Solar businesses and customers are already feeling the effect of this petition, and a recent report from GTM research predicted the new tariffs will raise the price of solar panels by 14 percent.
As the owner of a small Oregon-based solar business, I’m convinced these new tariffs are misguided. Rather than protecting our industry, tariffs hurt the American workers and solar companies they aim to help.
My business, Grape Solar, assembles and sells solar energy kits directly to customers worldwide, as well as at some of the country’s biggest retailers, including Costco, Home Depot and Amazon. We sell locally at Jerry’s Home Improvement Center in Eugene and Springfield.
While our kits use solar panels that were manufactured overseas, these panels are only a small piece of a complete solar energy system. More than two thirds of the value of our kits comes from parts manufactured here in the United States, such as inverters, racking and mounting systems. Panels have become a commodity, but their low cost has opened a world of opportunities for American manufacturers of complimentary products in the solar supply chain.
Tariffs raise the price of solar power, and thus remove the biggest engine driving our industry’s dramatic growth. As the technology has steadily become more affordable, Americans have embraced solar energy at a record clip: More capacity was deployed in the last 18 months than in the previous 30 years.
That’s because the success of solar depends on beating the cost of other forms of electricity generation, like coal and natural gas. Non-renewable sources of energy are the true competitors for America’s solar industry, not companies in China or Taiwan.
Tariffs also hurt jobs in installation and project development. These jobs on rooftops across the country are impossible to outsource and depend on continued high demand for affordable solar energy. The majority of the 23,000 new solar jobs created last year – when our industry grew at a rate ten times faster than national job creation – fall into these categories.
The solar legal cases are scheduled to drag on through the summer and fall. In doing so, they paralyze our industry with uncertainty. Pricing and supply are difficult to predict. Investment is frozen and some projects will fail.
Rather than continue with litigation, a better way forward is through a negotiated solution between SolarWorld and the Chinese manufacturers. This is the approach favored by the majority of U.S. solar companies, as well as the Chinese manufactures, represented through the Solar Energy Industries Association (SEIA), which is working hard to broker a deal between the two sides.
I believe SEIA’s proposal provides a great foundation for resolving this dispute. But to make any progress, SolarWorld must make clear what it wants. As a fellow Oregon company, I want to see SolarWorld and Chinese industry come together to negotiate an agreement that would be a win-win for all parties.
President Obama has both championed solar energy and pledged to make 2014 a “year of action” through use of his “phone and pen.” With a call, President Obama could bring the parties to the table for true negotiations and make the resolution of this trade dispute a priority for his administration.
A growing solar industry is good for all American solar companies – including SolarWorld. The U.S. solar industry is poised to continue to build on its success, create thousands more jobs and make real the promise of clean energy. But at this critical time, trade petitions are undercutting solar’s pricing advantage. To safeguard a bright future for American solar, we must negotiate a solution to this dispute.