U.S. solar panel manufacturers SolarWorld and Suniva say their days are numbered without relief from a flood of cheap imports China and Taiwan.
SolarWorld Americas CEO Juergen Stein, head of one of the largest solar panel manufacturers in the United States, is begging for relief from the flood of cheap imports.
The U.S. International Trade Commission heard the beleaguered executive’s words in testimony delivered before an Aug. 15 public hearing in Washington.
“Quite simply, we need the commission’s help to save solar manufacturing in the United States,” Stein said. “Unless you act promptly and decisively, the United States may find itself with no solar manufacturing sector left at all.”
The ITC is conducting an investigation into whether imports of crystalline silicon photovoltaic cells and modules have unduly harmed the domestic industry. SolarWorld and Suniva, another U.S. solar panel manufacturer, petitioned the ITC to conduct a section 201 investigation.
A section 201 investigation, which is authorized under the 1974 Trade Act, requires the ITC to determine whether an imported article is entering U.S. commerce at such increased volumes to cause serious injury to U.S. industry. If harm is determined, the ITC can recommend to the president an increase in duties, quotas, tariff-rate quotas (a two-level tariff, under which goods enter at a higher duty after the quota is filled), trade adjustment assistance, or any combination of those actions. The commission may also recommend that the president start international negotiations to address the causes of the increased imports.
In these cases, the relief period cannot be longer than four years, and if extended cannot exceed an aggregate of eight years.
Although U.S. solar panel manufacturers had gained some relief through antidumping and countervailing duties on these imports from China and Taiwan, it has not been enough.
“Both times, we expected the relief to give us the breathing space we needed to respond to unfair import competition,” Stein said. However, he noted “the continued buildup of global overcapacity, combined with Chinese producers’ efforts to evade the previous antidumping and countervailing duty orders…has resulted in an overwhelming surge of global imports into the United States, and with it a collapse of prices.”
Stein called the relief sought under a section 201 determination, “our last hope.”
The ITC’s preliminary report, released several days before the Aug. 15 hearing, said imports of solar panels from 2012 to 2016 increased five-fold. At the same time, solar installations in the United States grew 350 percent. In addition to home-sized installations, utility-scale power solar increased from 780 megawatts in 2011 to more than 10 gigawatts by 2016.
Stein said China, in effort to avoid import duties but still have access to the U.S. market, set up solar cell and module production in nearby Vietnam, Thailand, Malaysia, South Korea and Singapore.
“Countries that had shipped almost no products to the United States in the past, became major suppliers virtually overnight,” he said.
Some of the largest Chinese solar panel producers include Trina, Hanwha, C-Sun, and Yingli. There are allegations that some of these companies receive production subsidies from the Chinese government and exclusively manufacture their solar panels for export markets.
While China and Taiwan remain the No. 1 and 2 targets for relief from low-cost solar panel imports, a section 201 investigation requires the ITC to investigate all export markets of these products, no matter how inconsequential in the U.S. market their volumes might be. Thus, included in this particular investigation are solar panels from the NAFTA countries (Canada and Mexico), Jordan, Australia, Colombia, South Korea, Panama, Peru, Singapore, the CAFTA-DR countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic), and Israel.
Yet, installers and users of solar panels blame SolarWorld and Suniva for their inability to keep up with new U.S. market demands, and have asked the ITC to ignore their petitions.
“The only available sources of 72-cell modules with these specifications for most of the period of investigation were foreign—neither of the petitioners in this case had a product that they offered at these specifications, and certainly not at the scale or quality we required,” said Craig Cornelius, president of NRG Renewables, a builder of utility-scale renewable energy systems.
Many Americans seeking to purchase solar panels for their homes will opt for the cheapest priced solar panels and are less interested these days in whether they’re manufactured in the United States.
“Green Solar’s preference has been to install U.S.-produced solar modules on our residential and commercial projects,” Edward Harner, the company’s chief operating officer, told the ITC commissioners at the Aug. 15 hearing. “Unfortunately, this choice is no longer ours if we want to stay competitive. Because of the rapid rise in global cell and module imports, and their crushing impact on U.S. solar producers, we have had no choice but to supply increasing amounts of foreign made panels.”
For Bastel Wartek, president of California Solar Systems, whose 50 employees install about 400 residential solar systems a year, the inability of both Suniva and SolarWorld to deliver sufficient volumes of solar panels hamstrung his business.
“In May 2016, I switched from foreign suppliers to Suniva, based on the commitment from our distributors that we would have sufficient supply of modules that met our requirements. We transitioned from imported products to Suniva because we wanted to ‘Buy American,’” Wartek explained to the commission. “By August 2016, installations began using Suniva modules, but Suniva informed us almost immediately that it could not deliver as promised. The products we ordered were backlogged for at least the next three months.
“Suniva’s lengthy delay was unacceptable,” he added. “We decided to switch to SolarWorld, even though their modules were more expensive. We justified the premium because we could market the modules as ‘Made in the USA.’ However, we became concerned with the news of the insolvency of SolarWorld’s German parent company. We decided to diversify our suppliers in case the parent’s insolvency should affect SolarWorld America’s ability to deliver the quantity of modules that we require.”
The solar energy industry has continued to be a creator of American jobs in recent years. According to the Solar Energy Industries Association (SEIA), one out every 50 new jobs created in 2016 was related to solar. The association’s 800 members now represent more than 260,000 solar energy workers.
“Solar is an American success story, whose future remains bright,” testified SEIA Counsel Matthew R. Nicely before the ITC. “Its continued success could be destroyed by the misguided actions of the two petitioners and their small group of supporters—whose workers represent less than 1 percent of all those that work for this dynamic American industry.”
Nicely added the ITC “can and should prevent this ill-advised case from proceeding and allow this clean energy source to thrive, along with the thousands of jobs it creates.”
The ITC is scheduled to vote Sept. 22 on whether solar panel imports have caused serious injury to the domestic industry. If at least two of the current four commissioners vote in the affirmative, the case moves on to the remedy phase, in which the ITC has until Nov. 13 to make a recommendation to the president. If the ITC rules in the negative, the section 201 investigation will be terminated.
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