On Feb. 14, the U.S. International Trade Commission preliminary sided with complainant SolarWorld to impose tariffs on imported solar products from Taiwan in addition to the Chinese solar import tariffs already imposed. The imposition of such tariffs could lead to an increases in prices for solar consumers in the U.S.—or it could not.
This a two-edged sword for the U.S. solar industry—even for U.S. solar manufacturers and solar equipment manufacturers. On one hand it makes it easier for PV manufacturers like SolarWorld or presumably SunPower and Ascent Solar to compete with low-cost imports from China and Taiwan. Taiwan and China, it should be noted can shift certain parts of manufacturing back and forth to avoid existing import tariffs on solar goods at least partly manufactured in China. On the other hand, without some of the international pressure U.S. PV manufacturers may not innovate enough to keep their solar modules or panels competitive internationally if the fees are imposed. U.S.-based PV equipment manufacturers could also see some retaliatory efforts as well.
The other arm of the solar industry, the solar installer and developer side could bear even more of the brunt of such import tariffs, since installers are trying to purchase the best, low-cost PV modules they can for their customers—particularly in terms of home and business owners. If module prices are raised too high, they may not be able to continue selling at the pace they are, forcing layoffs or stagnation in one of the U.S.’s quickest growing employment segments.
Then there’s this, SolarWorld isn’t a U.S. company anymore even though it manufactures in Oregon, it’s owned by Germany’s SolarWorld AG. “With the ITC’s preliminary ruling in favor of SolarWorld’s petition to impose tariffs on imported solar products, it is now official: a German company is one step closer to manipulating U.S. trade procedure in order to prop up its own failing business and inflict harm on a job-creating industry,” said Jigar Shah, president of the Coalition for Affordable Solar Energy (CASE).
“By raising the cost of solar for American homeowners, SolarWorld is poised to inflict critical damage on an industry which last year added more than 20,000 solar installation, sales, and distribution jobs to the U.S. economy,” Shah added.
However, when ITC inflicted tariffs on certain Chinese imports it didn’t affect the cost of solar for homeowners, much—if at all. Nor, for the most part, did solar installers stop hiring in 2013 after the tariffs were instated purely because of the tariffs.
Meanwhile SolarWorld defended its complaint. “China has no production cost advantage,” SolarWorld said. “But government-sponsored Chinese producers have used illegal, export-intensive subsidies and artificially and temporarily low pricing tactics to undermine them.
SolarWorld argued that the low-cost imports were unduly affecting U.S. PV manufacturers. It also said that the previous tariffs are working. “Step by step, U.S. solar producers are returning to a day when they no longer are forced to compete with the government of China,” said Mukesh Dulani, president of SolarWorld Industries America Inc. “Please do not tell us that U.S. manufacturers who pioneered and built the solar industry cannot compete globally under conditions of fair trade.”
Then there’s the case of India. The U.S. recently raised a complaint about that country’s solar programs with the World Trade Organization (WTO). “Just this past week, the U.S. Trade Representative publicly condemned the protectionist solar policies of India because, in his words, protectionist policies would ‘actually impede India's deployment of solar energy by raising its cost.’ CASE implores the U.S. government to adopt the same perspective before a burgeoning U.S. industry is harmed for the benefit of one German company,” Shah observed.
Bottom line: Will tariffs affect the cost of solar for the U.S. home or business owner? In fact, the price of PV continued to fall in 2013 but at a slower pace, which is likely good for all involved. Basically the Magic 8-ball says: “Reply hazy, try again.”Tweet