Most U.S. Solar Companies have sharply opposed Trade Barriers, fearing the Higher Prices will hurt their businesses.
President Trump hit Imports of Solar Panels and Cells with New Tariffs on Monday in a bid to Protect struggling U.S. Manufacturers of the Renewable Energy Equipment from the Chinese Companies that dominate the Market.
But the Tariffs imposed by Trump, who has criticized China for "ripping off" the U.S. in Trade, were well below the Penalties he could have set, a sign that the White House took on board the Warnings that thousands of Jobs across the U.S. could be Lost if the flow of cheap Solar Panels was cut off.
Trump also imposed tariffs on Washing Machines and is still considering whether to impose Trade Barriers on Imports of Aluminum and Steel as part of his "America First" Agenda.
"The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard,” U.S. Trade Representative Robert Lighthizer said.
The Tariffs Trump set, 30% in the first year, and stepping down by 5 percentage points over the following Three years, were short of the 50% barrier he was allowed to impose under Section 201 of the Trade Act. The New Tariffs will also exclude the first 2.5 Gigawatts of Solar Cell Imports. The Tariff does include Canada, which the U.S. International Trade Commission (ITC) had left out of its Recommendations.
Still, many in the burgeoning U.S. Solar industry, and Free-Market Conservatives, have warned that lifting the Costs of Solar Energy could hamstring the Industry that has seen torrid growth over the past decade and is now cheaper than Coal and Natural Gas-fired Electricity in some parts of the Country.
“More good-paying jobs will be jeopardized by today’s decision than could possibly be saved by bailing out the bankrupt companies that petitioned for protection,” Clark Packard, Trade Policy Counsel at the Conservative R Street Institute, said. “Today’s decision also will jeopardize the environment by making clean energy sources less affordable.”
The Solar Industry Lobby Group said the New Tariffs would wipe out about 23,000 Jobs this year, and still would not provide Relief for Suniva or SolarWorld USA, the Two Companies that filed the Trade Complaint. Suniva, which is majority owned by a Chinese Company, is currently under Bankruptcy Protection, as is SolarWorld Industries, the German parent of SolarWorld USA.
“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. 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 Abigail Ross Hopper, Head of the Solar Energy Industry Association.
The New Penalty is less than the maximum 35% Tariff recommended by some Members of the U.S. ITC last fall, and the quota is higher.
Oregon-based SolarWorld and Georgia-based Suniva thanked the President in statements. "We thank President Trump for holding China and its proxies accountable, imposing necessary tariffs, and closing the threatened Canadian loophole," Suniva said in a statement. "Today the President is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight.”
The Tariff was considerably less than the almost 80% Penalty they would have preferred, and lacked the Strict Quota on Imports both had said was crucial in the run-up to the Decision.
SolarWorld CEO Juergen Stein said in a statement the Company was still reviewing the Tariffs, and was "hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States."
The Obama Administration had imposed Tariffs on Imports of Solar Equipment from Factories in China, but that did not affect Production Sites in other Countries, such as Malaysia or Vietnam, where Chinese Companies opened New Plants in recent years.
Lighthizer will also engage in discussions to try to Resolve those Obama era Anti-Dumping and Countervailing Duty Measures currently imposed on Chinese Solar Products and U.S. Polysilicon. "The goal of those discussions must be fair and sustainable trade throughout the whole solar energy value chain, which would benefit U.S. producers, workers, and consumers," the United State Trade Representative (USTR) said in the statement.
Still, some Analysts have said that since the Cost of Solar Panels had fallen so sharply in recent years that they now make up less than 20% of the overall Price of a Home System and about One-Third the Cost of a large, utility-scale Plant. That means a Tariff may have only a limited affect, since even a 50% Tariff would likely raise the Cost of the largest Solar Power Plants by about 15% and a little more than 5% for the Average Home System.
Solar Installations in the U.S. hit a Record of 14.6 Gigawatts of capacity in 2016, and Solar Energy Industries Association (SEIA) expects New Capacity additions to slip to 12 Gigawatts this year, about the Capacity of 12 Nuclear Power Units.
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