Solar trade case update: Here’s a report the ITC sent explaining how ‘unforeseen’ the PV import problem was

Trade case solar

The final outcome of the Suniva/SolarWorld  trade case still hangs over the solar industry as Trump has until Jan. 26 to make the final decision on a remedy, following the International Trade Commission’s injury ruling way back in September. It was our assumption at that time that this was just a countdown until tariffs were implemented by the president, and we still feel that way, but the administration appears to at least be doing its due diligence before deciding.

First reported in this excellent piece from Greentech Media, a U.S. ambassador requested a supplemental report in November to assist in the decision making process, specifically to explain what “unforeseen” events led to the injury of domestic production of crystalline silicon photovoltaic (CSPV) cells and modules. Read over how the ITC defined unforeseen and answered this question here: ITC_Report_Suniva.

Why request this? Well, it could be preparation for a potential challenge to a tariff decision by China, on appeal to the World Trade Organization, which has struck down such tariffs in the past, specifically on this question of whether the issue at hand was truly “unforeseen.” Here are some select portions:

As part of its WTO accession, the government of China made a series of commitments concerning a variety of topics, including non-discrimination; transparency; investment; state-owned and state-invested enterprises; pricing policies; and fiscal, financial, and budgetary activities by the central government and sub-national levels of government. For example, the government of China agreed to implement market-oriented economic reforms and to abide by WTO rules and principles, including to “allow prices for traded goods and services in every sector to be determined by market forces,” to “eliminate all subsid{ies}” contingent on export performance or the use of domestic goods, and to “not influence, directly or indirectly, commercial decisions on the part of state-owned or state-invested enterprises.”12

In direct contradiction of these commitments – and unforeseen by the U.S. negotiators at the time that the United States acceded to GATT 1947, at the time that the United States acceded to the WTO, or at the time that the United States agreed to China’s accession to the
WTO – the government of China implemented a series of industrial policies, five-year plans, and other government support programs favoring renewable energy product manufacturing, including CSPV products. The government of China’s industrial policies, plans, and support programs took advantage of the existence of programs implemented by the U.S. government to encourage renewable energy consumption that, consistent with U.S. WTO obligations, did not favor U.S. manufacturers but instead were directed at owners of renewable energy systems. These industrial policies, plans, and government support took a variety of forms and led to vast overcapacity in China and subsequently in other countries as Chinese producers built facilities elsewhere, which in turn ultimately resulted in the increased imports of CSPV products causing serious injury to the domestic industry in the United States.

Our two cents per kWh

We are left wondering why the administration wanted this supplement, what was their reaction was to it (high fives? More concern about an appeal?) and what this could mean for a WTO if it comes to that. If you’d like our informed, non non-world trade case opinion, the explanation in the document doesn’t seem to prove the logic underneath their decision, possibly leaving it open to the WTO striking it down on appeal. But we also thought there was no way they could find serious injury. So, there’s that.

We just wanted to note the existence of this supplemental document and remind you that something wild still this way comes. Feel at least a little rest assured that some thought is going into this tariff decision (Trump is, like, super smart and a very stable genius after all).

— Solar Builder magazine

Exhale: The Investment Tax Credit remains in the latest tax reform bill

ITC extension congress

The final version of Congress’ tax reform legislation was revealed and left the coveted Investment Tax Credit (ITC) alone, SEIA reports.

“After weeks of negotiations, the final tax legislation released today maintains the solar Investment Tax Credits (ITC) for both commercial developers and for homeowners in its current form,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. “This is a great victory for the solar industry and its 260,000 American workers and we commend our bipartisan solar champions in Congress for their diligent efforts to maintain solar’s critical role in America’s economy.”

This is good news at a time when solar needs all it can get from the federal level, as the world awaits the final outcome of the other ITC. Here is SEIA’s final pitch on that front, in case you missed it.

Outside of the tax credit, the Advanced Energy Economy was a little less pleased with the overall outcome for renewables.

“Despite progress on reducing the corporate tax rate, the final tax bill now before Congress is a missed opportunity to promote growth and provide market certainty for advanced energy businesses that employ more than 3 million workers across the United States,” said Malcolm Woolf, senior vice president for policy and government affairs at AEE. “We are still concerned about the impact of certain elements of the bill, particularly the BEAT provision, which will likely undermine investment in advanced energy. We are also concerned that tax-exempt bonding was not re-authorized.

“We are also disappointed that the bill does not level the playing field for other advanced energy technologies, such as fuel cells, storage, combined heat and power, geothermal, nuclear, and distributed wind,” Woolf continued. “But we understand that Congress intends to address this issue separately. Such legislation should adopt the House-passed approach of a phasedown of tax credits over several years. Short-term fixes fail to provide the market certainty needed to unleash the potential that these technologies can bring to the American economy.”

— Solar Builder magazine

Solar trade case update: Overview of ITC remedies and reactions from solar executives

solar ITC remedies

The International Trade Commission made its remedy recommendations in the Suniva/SolarWorld Section 201 trade petition case known to the world last week, which included a mix of tariffs and quotas, but nothing near the levels the petitioners were seeking. Those recommendations will be sent to Donald Trump by Nov. 13, and then he will have 60 days to make the final determination.

We continue to believe this is a futile exercise, considering the former host of the Apprentice gets to decide whatever he wants, but for the less cynical, these recommendations are surely instructive and could very likely anchor pieces of the final outcome. Below is the CliffsNotes version of each commissioner’s recommendation and reaction from a few solar executives.

ITC recommendations: Rhonda Schmidtlein

Tariffs? Yes – an ad valorem tariff (a percentage of the cost of the cell or module at the border).

Quota limitation? No, just quotas on tariff levels.

ITS solar tariffs

Anything else notable? She would not include imports from Australia, Colombia, Israel, Jordan, Panama, Peru and Singapore in the final list.

David Johanson, Irving Williamson

Tariffs? Yes – an ad valorem tariff (a percentage of the cost of the cell or module at the border). Cells at 30 percent after 1 GW, phased down 5 percent in subsequent years. Modules at 30 percent (no quota), phased down 5 percent in subsequent years.

Quota limitation? No, just quotas on cell tariff levels.

Anything else notable? Johanson and Williamson would not apply these tariffs to Australia, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Nicaragua, Panama, Peru and Singapore.

They also recommend the consideration of product exclusions, requested by respondents.

Solving C&I Solar: How boutique financing is growing this underserved solar segment

Meredith Broadbent

Tariffs? No.

Quota limitation? Yes. A four-year quantitative restriction on imports starting at 8.9 GW in year one, increasing by 1.4 GW each year after. She chose 8.9 GW based on market share of imports in 2016.

Anything else notable? She recommended the SEIA licensing concept: Selling import licenses at public auction at a minimum of 1 cent per watt, which she estimates could bring in $89 million of revenue in year one. That revenue would then be used to re-develop the domestic industry (rehiring, R&D, etc.)

Broadbent provided the most rationale for her decision within the initial release, noting she believed a tariff would be too harmful to the overall industry, and that the petitioners did not present a plan for becoming competitive after trade-restrictive tariffs were imposed.

Funniest note in the recommendations? “Full details on their recommendations will be included in the report to the President.” (Yea, I’m sure he’ll be all over the chance to read even more about this. He just loves using in-depth info to make informed decisions.)

Executives react

“Even at levels below what the petitioners wanted, we still think the tariffs proposed would hurt our industry and will continue to advocate voraciously for the import fee proposal. But it’s a great starting point for negotiations with the Administration,” stated Abigail Ross Hopper, CEO of SEIA.

“Today’s three different recommendations demonstrate Suniva’s request was not permissible under law,” said Ed Fenster, chairman of the U.S. solar firm Sunrun, in a statement. “We believe the Administration will go the next step, look past the narrow legal lens of this process and see what is plainly visible: the best move for America’s workers is to reject entirely this bailout of two bankrupt companies.”

“The ITC’s suggestions for ‘remedies’ represents an unfortunate and grossly unnecessary potential intrusion of the federal government into a market that is already working,” stated Sunnova Energy Corporation’s Chief Executive Officer William J. (John) Berger. “Artificially inflating prices at the behest of a few poorly-run, foreign-owned companies not only harms U.S. consumers but it abuses a process that was meant to protect U.S. companies from truly unfair trade practices.”

Tony Clifford, chief development officer of Standard Solar, in this Op-ed: They have the potential to do damage to the U.S. solar industry. But they are in no way threatening to its existence, which could not be said about the remedies for which Suniva/SolarWorld asked. They are a basis from which, as the Solar Energy Industries Association (SEIA) suggested, a mutually acceptable compromise can come.”

Three takeaways from SEIA white paper on financing C&I solar with C-PACE

“Limiting or slapping big tariffs on solar imports might marginally benefit U.S.-based solar manufacturers, but would hurt every other part of our homegrown solar industry: solar installers, salespeople, project developers, financiers, and even manufacturers of other solar system components,” stated John Rogers, senior energy analyst at the Union of Concerned Scientists. “If the president proceeds down the path of limiting our access to international solar products, a serious number of the 260,000 U.S. solar workers—and the many prospective solar customers that depend on them—will take the hit. ‘Little gain, lots of pain’ is a poor approach to economic development, and a bad reason to derail how solar power is contributing to the nation’s impressive clean energy growth.

“The 201 trade case brings near-term challenges to the U.S. market, but we believe the industry will adjust and sustain the momentum it has already built through strong technological advancements over the years,” stated Archie Flores, General Manager, LONGi Solar Technology (U.S.) Inc. – a Chinese-based module manufacturer. “We continue to view the U.S. as a valuable market and we will find ways to continue to serve customer demand regardless of any trade dispute. Module cost is just one factor affecting solar growth. The global market is now entering the PV 3.0 era, wherein higher power, improved reliability and increased energy yield allows for better economics in the cents per kilowatt-hour energy level rather than the traditional focus on cents per watt per unit. At LONGi, we remain excited with the road ahead and we have full resolve to make solar a mainstream energy option.”

— Solar Builder magazine

Political solar news roundup: Utah net metering fight, ITC case stalls Minn. PV plant, SEIA adds to board

Utah rooftop solar installs in standstill

utah net metering solar

The Utah rooftop solar rate debate is reaching its peak, and thus creating uncertainty in the local market. Last November, Rocky Mountain Power proposed charging solar rooftop customers installation fees and nearly triple monthly customer charges and peak-time usage, which the solar industry and solar adopters objected to. The proposal will now be considered over the next two weeks by the Utah Public Service Commission in two hearings – one for public input and one to consider the proposal.

As the Spectrum reports, the same arguments are being put forth that are always put forth.
In a study supporting the measure, RMP researchers suggest the typical rooftop solar customer underpays their actual cost of service by about $400 per year, and with an estimated 20,000 rooftop solar customers it amounts to millions statewide that other customers must pay to make up the difference.

People with solar systems on their homes typically stay connected to the power grid, allowing them to purchase power from the utility as needed or to sell off any excess power generated back to the utility.

But RMP authors argue the utility pays full retail price for the solar-produced power, meaning that solar customers aren’t being charged equitably for capital investments or infrastructure like work crews and power lines. The buyback rate from rooftop is sometimes three times the rate the utility pays for solar from large-scale facilities.

And then the same counters are being countered by solar advocates.

Utah Clean Energy, a Salt Lake City-area think-tank, produced its own analysis of RMP’s numbers and concluded that the utility was undervaluing solar’s benefits, leaving out the fact that generation taking place on rooftops doesn’t need to be done elsewhere, lowering transmission costs and the demands for new generation facilities. The analysis concludes rooftop solar customers are actually saving the utility $1.3 million annually.

And just like its neighbor Nevada, solar adopters are preparing for the rug to be pulled out from under them.

Solar companies and their customers fear higher costs will slow the booming industry and community benefits, like cleaner air. Among them are the Searles, who scraped up the money last year to put 14 solar panels on their modest home in Rose Park.

Erin Searles says a rate hike now would undercut their investment.
“It’s kind of a punch in the gut, honestly,” she says. “You know, we did this for the right reasons. It’s, it’s completely unfair.”

Solar panel manufacturer unsure about Minnesota investment now

The Suniva trade petition hearings draw near. You can prep yourself with all of our previous coverage here:

Suniva case watch: SEIA sends out four ways you can help this week

GTM Research predicts solar market doomsday scenario if Suniva’s proposal is approved

SEIA explains plan to lead fight against Suniva petition, remedies for the future

But we travel to Minnesota where Heliene Inc., a Canadian manufacturer that just opened a state-side manufacturing plant in a jobs-starved former mining region – or at least they hope to do so, still. Much will depend on the ITC ruling.

From the Star Tribune:

The Iron Range is no stranger to trade disputes. Usually it’s on the other side, trying to stop cheap foreign steel from glutting the market. The region is only just beginning to fight its way back from a recent market slump that idled half of its mines and threw thousands of people out of work.

“I’d much rather see our friends in Canada helping out” with a new business on the Range “than some of our foreign competitors who have flooded the market with solar in the past,” said state Rep. Jason Metsa, DFL-Virginia, who signed on to a letter to the ITC in July against the tariffs. “We’re excited for the opportunity to make solar manufacturing work up here on the Iron Range.”

The Iron Range Resources and Rehabilitation Board hopes to invest $10 million on new equipment for the plant, which eventually would employ 25 to 70 workers.

SEIA adds to board of directors

SEIA

Solar Energy Industries Association (SEIA) has added three companies to its board of directors:

  • Tradewind Energy, Inc., a Kansas City-based developer of utility scale wind and solar projects,
  • DEPCOM Power, a development, engineering, procurement, construction, operation and maintenance company for utility-scale solar and
  • McCarthy Building Companies, Inc., a national general contractor.

“The addition of these three great companies is another strong indication that the broader solar industry is stepping up to fight for this industry’s future,” said Abigail Ross Hopper, SEIA’s president and CEO. “At a time when the solar industry is both enjoying significant growth and facing a trade challenge, DEPCOM, McCarthy and Tradewind Energy are making an important contribution to the whole industry, and we are thrilled to have them on board.”

Tradewind is actively developing wind and solar sites in 22 states throughout the central and eastern regions of the U.S. The company was started in 2003 and has become one of the largest independent renewable energy developers in the country.

Founded in 2013, DEPCOM Power is a “Buy America Products First”, “Hire Military Veterans First” and “Donate 10% Net Income to Charity” company leveraging a highly experienced team of solar industry veterans.

One of the oldest American-owned construction companies, McCarthy Building Companies has been helping this great nation grow project by project, delivering facilities that communities rely on and building up neighborhoods by helping those in need.

— Solar Builder magazine

Solar industry would lose 88,000 jobs if Suniva’s trade protections are imposed

solar jobs

The Solar Energy Industries Association (SEIA), the national trade association for the solar industry, is estimating that the American workforce would lose 88,000 jobs, about one-third of the current U.S. solar workforce, if Suniva gets the trade protections proposed in its petition with the U.S. International Trade Commission (ITC).

This spring, the Georgia-based company asked the ITC to place a tariff on imported solar cells and set a price floor for virtually all imported panels,arguing that it cannot compete with foreign rivals. Suniva, which is majority-owned by a Chinese firm, filed the petition after declaring bankruptcy in April.

Among the states standing to lose the most jobs include California with an expected job loss of 15,800, another 7,000 jobs would be lost in South Carolina, and 6,300 in Texas, according to preliminary estimates by SEIA.

Despite Suniva’s claims that its move is meant to protect domestic manufacturing, SEIA found that U.S. solar manufacturing jobs will actually decline if the petition is granted.

“These new estimates show the potential damage to the solar industry as a result of this petition,” said SEIA President and CEO Abigail Ross Hopper. “Rather than help the industry, the action would kill many thousands of American jobs and put a stop to billions of dollars in private investment.”

SEIA explains plan to lead fight against Suniva petition, remedies for the future

“Our estimates show that even in the states where Suniva and its lone supporter, SolarWorld, have operations, if the petition succeeds, there would be many times more jobs lost than expected gains for two struggling companies,” Hopper said.

The case comes after a record-breaking year of solar energy growth in 2016 when industry jobs grew by 25 percent year-over-year and electricity generating capacity nearly doubled.

SEIA forecasts that solar jobs would be lost in all segments of the market. The utility-scale market, which has paced the industry’s growth for years, would see jobs shrink by 60 percent, while residential and commercial employment would fall by 44 percent and 46 percent, respectively, SEIA said.

“Suniva’s trade petition has the potential to negatively impact more than a thousand hardworking Swinerton installers throughout the United States, with emerging utility-scale markets taking the hardest hit,” said George Hershman, senior vice president and general manager of Swinerton Renewable Energy. “Should the petition be approved, those markets would no longer be cost-competitive, killing a growing economy and a real opportunity for job creation.”

 

— Solar Builder magazine