ITC suggests Trump impose up to a 35% tariff on imported solar modules

The president has 60 days to make a decision.

Megan Geuss – Nov 1, 2017 11:23 am | 103

A solar farm under construction in Punta Gorda, Florida, in 2016. Credit: KERRY SHERIDAN/AFP/Getty Images

The International Trade Commission (ITC) issued its recommendations for solar panel component tariffs on Tuesday, a month after it decided that US manufacturers of cells and modules had been harmed by cheap equipment imports. The commissioners offered three different recommendations, but it will be up to President Trump to decide on which recommendation to follow—or to make a completely new recommendation.

The president has 60 days to make a decision. High tariffs could mean more solar panels built domestically, but tariffs would also cause a contraction in the solar installation market as the cheapest imported panels are no longer available.

On the high end of the recommendations made by the ITC (PDF), the commission’s chairperson recommended a 35-percent tariff on all imported solar modules, as well as a four-year tariff of 30 percent on solar cell imports exceeding 0.5 gigawatts and a 10-percent tariff on cell imports under that limit. The tariffs would decline over the years.

The intermediate recommendation came from two ITC commissioners, who suggested a 30-percent tariff on modules and a 30 percent tariff on imported solar cells in excess of 1GW. Again, the tariff would decline after the first year.

The most relaxed recommendation came from one commissioner who recommended a four-year import quota system that allowed 8.9GW of solar modules and cells to be imported in the first year.

The issue came before the ITC earlier this year when two solar panel manufacturers—Suniva and SolarWorld Americas—petitioned the commission for tariffs, saying that cheap imports were killing the American domestic panel manufacturing industry. Suniva, which is 63-percent owned by a Chinese company, and SolarWorld Americas, whose parent company is a German firm, specifically requested a “40-cent-per-watt duty on imported cells and a 78-cent-per-watt floor price for imported modules,” according to an E&E News article from August.

According to The New York Times, Suniva “called the International Trade Commission’s recommendations ‘disappointing’ in a statement, saying they were not strict enough. It called on Mr. Trump to implement more stringent restrictions ‘necessary to save American manufacturing.’” Suniva filed for bankruptcy in early 2017.

SolarWorld Americas took a more optimistic approach. In a statement, the company said: “We are pleased that a bipartisan majority of the Commission has recommended tariffs, tariff-rate quotas, and funding for the domestic industry. This is a useful first step.” It added that it preferred its own (stricter) tariff recommendations, though, stating: “The process will now move forward to the president, and we continue to believe that the remedies SolarWorld has recommended are the right ones for this industry at this time.”

The case pits solar manufacturers against solar installers in a unique way, causing fractures in the US solar industry. The Solar Energy Industries Association (SEIA), which represents the solar industry as a whole, fought vigorously against the possibility of tariffs, maintaining that Suniva’s requested tariffs would cause the fast-growing industry to shed about 88,000 jobs out of 260,000 counted at the end of 2016.

On Tuesday, the SEIA wrote that the ITC’s decision was better than the association had expected, as “in no case did a commissioner recommend anything close to what the petitioners asked for.”

Still, the association noted that the “proposed tariffs would be intensely harmful to our industry.”