Solar trade case talk and what’s next with SEIA CEO Abigail Ross Hopper

SEIA CEO trade talk solar builder buzz

At Solar Power Northeast last week in Boston, we grabbed 15 mins of SEIA CEO Abigail Ross Hopper’s time to chat about where SEIA and the solar industry go now that the trade case drama has ended and the 30 percent tariff is in place. Below is a truncated version of our chat, but be sure to listen to the entire episode (and subscribe!) using the links below.

Was SEIA surprised by the trade case outcome?

“I was a litigator for a long time, and when you get ready to try a case, you get completely convinced of your own position and it can be hard to see outside of that. I felt like, at least for me personally, there was a brief moment in time that I was entirely convinced there would be no finding of injury, no tariff, and this would all go away. I became disabused of that idea pretty quickly [laughs], and so we were in the realm of the possible, and we have a president who likes tariffs, who ran on an aggressive trade policy, so we knew there would be something coming. And our job was to articulate why it was a terrible idea, but also to mitigate the impact and to put some boundaries around it. There were pieces of it that did provide some hope. The 5 percent step down was significant. The exclusion for cells at 2.5 GW.

“One of the most interesting parts of the whole process was the galvanizing effect it had on our industry. In the face of a really sign threat, it brought together people in the solar industry and lots and lots of people outside the solar industry.”

Here, I drone on about how the broad coalition SEIA brought together to fight against tariffs reminded me of the plan hatched by Adrian Veidt in The Watchmen (creating a larger threat that brought together parties that previously were at odds). The point being:

Will these new relationships, which came about only through this fight against tariffs, lead to a longer term win for the solar industry?

“I don’t know if I would go quite so far as to say it was beneficial, but I do think there are unintended consequences that will benefit us. One of them is, our industry did galvanize and speak with one very loud voice. There was no question who the solar industry was and what our position was. I knew we had done a good job when I was sitting in the White House and someone echoed back to me how many jobs would be lost. And it was my number that my research department had put out. So when the administration officials told me it would be 88,000 jobs, I thought OK, we are doing something right.

“And I think as an industry, for us to play on that big stage and to have the Sean Hannitys of the world involved, and to be on Fox and Friends, and to have the Heritage Foundation involved … it gave us a sense of what was possible. I feel strongly, we are 1 to 1.5 percent of energy generation, and we’re going to be 30-40 percent, and we’re going to have to play on that big stage, and this was an opportunity to do that.”

Do you now think the broader solar message is going to resonate more? You galvanized for a different reason, but maybe those outside of solar picked up some nuggets of information or understood the value a little bit more than they did prior?

“I think so. There were some myths that were circulating around the trade case. One of them was that solar was too expensive and was being grown by policy like RPS or mandatory procurement by utilities, but research tells us that’s just not true. Two-thirds of solar last year was bought because it was the lowest price. We compete head to head with natural gas and with wind, and we win based on price. That was not something that had penetrated government officials or the general public. So that is a message that will continue to resonate. People were constantly surprised that most homeowners aren’t choosing solar because they want to go green, but are choosing solar because they want to save money.

Seeing how well this large-scale, well-funded push worked at spreading the message of the solar industry, is there any chance of launching as big of a push, but for different issues? What are the broader next steps?

“I’ll say two things. One is that I think it would be natural for the industry and association to step back, and take a deep breath, but that is the opposite of what we’re going to do. Now is the time to step up. That’s the general theme.

“More specifically, we’ve looked at where the tariff is going to be the most impactful across the states, and we’re putting together a package of ways that these states could mitigate the #Trumptariff. So, if you’re in North Carolina, here are four things the governor or legislature or commission could do to help solar continue to grow in North Carolina. What policies need to be in place to continue to grow solar?

Outside of the trade case, what are some other issues – like the Eversource demand charge in Massachusetts – that SEIA is focused on?

“Obviously we are cognizant of the [Eversource] demand charge and think it’s a terrible precedent to set, and we are working with people in Massachusetts to change that. But we are focused on a couple things. One is consumer protection. If you look at areas in which we are vulnerable, we’re vulnerable to claims that we’re bad actors. So we have an aggressive consumer protection effort in place and are working with attorney generals across the country on that.

“Diversity is another place in which I personally have a lot of interest. I keynoted an event this morning, with a couple hundred people there, and to say a handful would be generous, of people of color, and a couple women in the room. This industry is just a very homogenous industry and we need to change that. And we need to make sure that solar is accessible to all members of the community — the actual product as well as the workforce.

“I think solar + storage, what policies need to be put in place, to allow that to continue to proliferate. And another, I know this is super wonky, but wholesale markets. Secretary Perry had this proposal to subsidize coal and nuclear energy, and its veil of resiliency and reliability. That was rejected, but the issue is going to get kicked to the regional transmission operators and we need to be in those conversations. Not only so others don’t get incented because then we’re not going to win on price, but also so that we create pricing mechanisms and structures in the market place so solar can get compensated for what we bring to the grid.

“The energy world is so dramatically different than it was 10 years ago. There is consensus that things are changing, so part of our job is to make sure they change in a rational, structured way rather than go off a cliff [laughs.]. So things like market design, while it’s not particularly exciting, if you explain that we just want to make sure solar gets paid for what it brings to the grid, people get that.”

— Solar Builder magazine

Trump imposes tariffs on solar cell, module imports

trump trade case

It happened: Yesterday, President Trump’s Section 201 trade case decision was announced, and the decision was to impose tariffs on imported solar cells and modules.

The tariff terms

30 percent in year one, with a 5 percent decline each year for four years. These are not as high as the petitioners were asking, but are in line with the recommendations from the International Trade Commission. A nice departure from the ITC recommendations is the 2.5 GW exemption quota, which is set higher than anticipated.

exempted cells

As it stands now, this applies to all polysilicon cell and module imports, with no countries exempted, but the focus in the announcement and in the accompanying fact sheet focused solely on China, so this could change. A statement from U.S. Trade Representative Robert Lighthizer did indicate that talks were ongoing on this front as he “will engage in discussions among interested parties that could lead to positive resolution of the separate antidumping 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 fall out

Right off the bat, the Solar Energy Industries Association (SEIA) says this decision will cause “the loss of roughly 23,000 American jobs this year, including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments.”

SEIA estimates that a tariff at this level will eliminate, not add to, American manufacturing jobs. There were 38,000 jobs in solar manufacturing in the U.S. at the end of 2016, and all but 2,000 made something other than cells and panels, the subject of this case. Those 36,000 Americans manufactured metal racking systems, high-tech inverters, machines that improved solar panel output by tracking the sun and other electrical products.

The petitioners had cited close to 40 companies driven out of business by unfair import competition, but that list has been refuted since, with only three of those companies able to make that claim.

GTM Research estimated that tariffs imposed at this level were likely to increase solar module costs by 10 to 12 cents per watt, which would then likely slow the market by 8.3 percent.

GTM solar tariff chart 4_PV capacity

Maybe a bright spot: Don’t sleep on the idea of foreign manufacturers opening up shop in the U.S. to avoid these tariffs (because we definitely did at first). The Jacksonville Daily Record has already caught wind of one such plan from an unnamed solar manufacturer seeking 53.9 million in tax refunds to open up shop. Reading between the lines of the info available, it looks like it could be JinkoSolar.

The project summary said “Volt” makes solar panels and modules and wants to hire 800 people in Jacksonville to make and assemble the products, as well as set up a U.S. headquarters, by year-end 2019. Based on the information in the legislation and the status of the solar-panel industry, here’s a guess about who it could be: Shanghai-based JinkoSolar Holding Corp.

The reaction

The Trump Administration is obviously excited about this news, releasing it early in the week, and many national news outlets are positioning this as an issue that “split” the solar industry, but you’ll be hard pressed to find many voices outside of Suniva and SolarWorld who are that excited. And this includes voices outside of solar and outside of the stereotypical left-wing side of the aisle. Remember, this is a solar industry issue that garnered a wide range of bipartisan support – including the far right Heritage Foundation and talking head Sean Hannity– all in opposition to this decision.

Tony Clifford, chief development officer, Standard Solar: “It boggles my mind that this president – any president, really – would voluntarily choose to damage one of the fastest-growing segments of our economy. This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout.”

Bill Vietas, president of RBI Solar in Cincinnati: “There’s no doubt this decision will hurt U.S. manufacturing, not help it. The U.S. solar manufacturing sector has been growing as our industry has surged over the past five years. Government tariffs will increase the cost of solar and depress demand, which will reduce the orders we’re getting and cost manufacturing workers their jobs.”

Costa Nicolaou, president and CEO of PanelClaw: “What’s most disappointing is that the president sided with two foreign-owned companies and didn’t listen to Americans from across the country and political spectrum who understood tariffs will cause great economic pain for so many families in the solar sector.”

Michael Maulick, president and CEO of SunLink Corporation: “Artificial price hikes through tariffs only work to impede economic progress when the solar industry has worked for years to make solar affordable through innovation, a global supply chain, production scale growth and private investments,” said “While we have always been module agnostic and supported modules of all types, we also believe the power of choice ultimately provides the most flexibility for customers to make utility-scale and commercial solar more pervasive. We remain committed to working closely with the energy industry and our manufacturing peers towards a solution that supports domestic manufacturing and domestic innovation with a global mindset to keep America solar strong.”

Paul Spencer, Clean Energy Collection, founder and CEO: “Trade barriers, such as those proposed by the ITC and the one ultimately selected by the president, needlessly make solar more expensive at a time when are seeing record low prices that make solar cheaper for consumers and provide benefits for the global environment. The selected remedy needlessly increases the cost of energy for all Americans.”

Abigail Ross Hopper, SEIA’s President and CEO: “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.”

Julia Hamm, President and CEO of the Smart Electric Power Alliance (SEPA): “A robust, competitive solar market is essential to the United States’ transition to the clean, safe, affordable and resilient energy future that SEPA and all its members are working toward. The President’s action in the solar trade case will trigger economic disruptions in many segments of the industry, thus threatening our common vision and the many benefits clean energy can bring to American consumers and businesses.”

— Solar Builder magazine

Solar trade case decision this week: Do these last second appeals, long-shot deals have a chance?

The outcome of the solar industry’s Suniva/SolarWorld trade case is due Friday, Jan. 26, and the speculation about the decision and last second backroom dealings are running wild. Here’s everything we’ve seen in the last few days.

Trump solar trade case

Last second appeals

The solar industry sent along its final attempts at explaining 1) why tariffs will harm the industry and hurt job creation and 2) why tariffs will not only not boost manufacturing, but will only bail out two bankrupt foreign-owned companies.

One attempt was from the Energy Trade Action Coalition, whose members include U.S. manufacturers and workers across the entire solar energy supply chain. The letter the group sent highlights the small place Chinese imports have in the current U.S. market, and then refutes the idea that 41 companies went out of business because of unfair competition from imports.

“The petitioners started this myth by misidentifying 41 companies as closed due to imports; in truth, only 3 companies did,” the letter states. “The others closed due to manufacturing or management failures, not imports. In fact, today solar manufacturing is strong in America, with more than 500 solar manufacturers operating across the nation.”

The charts in the letter are pretty compelling. Here’s the whole thing: Energy Trade Action Coalition Letter

Another attempt was a personal letter sent from SEIA CEO Abigail Ross Hopper to the president to explain, one last time, how this decision will affect jobs.

Ironically, the very jobs we all want to grow, American manufacturing jobs, will retract as the number of projects are scaled back significantly. This is not hype; this is what will happen. American companies manufacture, among other things, steel and aluminum racking systems, inverters and tracking devices. Raising solar prices, as these tariffs would do, would reduce demand for those downstream products and kill manufacturing jobs.

Long-shot settlement

Bloomberg says there is a long-shot idea now being tabled by the solar industry: Settle the previous trade dispute with China and split the estimated $1.5 billion the government has collected from duties on imported panels since 2012 among stakeholders in the U.S. and China.

American solar companies are pushing to divvy up that money between manufacturers and suppliers in both the U.S. and China as part of a deal that, they say, could effectively reset solar-trade relations between the two nations.

The proposal, which trade experts describe as a long shot at best, would call for Trump to drop existing duties on solar panels — and for the president to not levy new ones. China, in turn, would abandon its own tariffs on U.S. polysilicon, a key solar-panel ingredient. There would be many hurdles to making it all happen. Chief among them, of course, is convincing Trump to take a conciliatory stance with China. Yet solar companies say the deal would fit squarely into the president’s agenda.

Specifically, at the trade hearing last month, NRG’s Craig Cornelius proposed to split the solar duties that have been collected three ways between U.S. panel manufacturers and polysilicon producers and the Chinese companies that have been paying the tariffs. Instead of new duties, he called for imposing a fee of 2 cents per watt on imports.

Such a decision could be a huge step forward for the global solar industry, but it feels unlikely. All of the rumblings point to the Trump administration wanting tariffs. Such as:

Tariff decision is already made?

And then this update from PV Magazine, citing sources close to the situation that said the tariff announcement is written and was nearly delivered last week, but delayed due to the government shutdown stuff.

According to the source, details on the decision are sparse, but it appears each side will get something, and both sides will find things with which to disagree.

In broad outline, the decision will impose tariffs on cells and modules that will only kick in after quotas are met, though no details on the quotas were available at press time.

“We’re hearing the tariff percentages won’t be as large of a hit based on what the rumored percentages have been,” the source told pv magazine. “There will also be exemptions to the tariffs, though the details are still unknown.”

Sounds like it’s just a matter of timing at this point for the Administration to push that “Trump supports U.S. manufacturing with new tariffs” headline. At least the early signs point to a less harmful decision than what the petitioners were asking.

— Solar Builder magazine

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

Solar industry tells Trump to reject tariffs in ‘America First Plan’

trump solar energy plans

Today, the Solar Energy Industries Association (SEIA) sent its plan to the White House for boosting both U.S. manufacturing and the U.S. solar industry. As you might guess by the name, the America First Plan for Solar Energy, this is definitely the solar industry’s attempt to frame its message in a way that will most appeal to the Trump Administration.

The #1 message delivered in the America First Plan is to reject tariffs, with all other plans being secondary. SEIA lays out how, by just rejecting tariffs, Trump’s decision would grow jobs, support the military, ensure U.S. energy dominance and not provide a bail out to foreign companies. There are even quotes from Sean Hannity sprinkled in.

The politics at play in the pitch seem pretty obvious and likely necessary (Will Trump want a “save U.S. manufacturing” or a “protects national security” headline?) but it shouldn’t distract from the cogent recommendation the group sent to the ITC, which is the meat underneath the America First messaging. Those additional recommendations are listed in Step 6 of this plan:

SEIA recommends that President Trump create an import license fee system to imported crystalline silicon PV (CSPV) solar panels using Section 1102 of the Trade Act in combination with Section 201 of the 1974 law.

License revenues collected by the U.S. government are then distributed to the domestic industry to incentivize manufacturing growth. At a fee of a half cent per watt, this would raise roughly $192 million over three years for U.S. manufacturers. A 1¢ per watt fee would raise $384 million

This is money that would be taken from foreign manufacturers and delivered directly to American manufacturers.


— Solar Builder magazine