Understanding the Section 201 Solar Trade Case and How to Fight It
The U.S. solar industry is facing a serious threat which could set us back years of progress and we are here to make sure you understand both how this this threat came to be and how you can fight it! Read on to learn everything you need to know about the section 201 solar trade case plaguing the United States.
Solar Trade Case (Section 201): Timeline of Events
Suniva Files Section 201 Petition:
The attack on the U.S. solar industry all started when Suniva, a U.S. manufacturer of solar modules and cells, went bankrupt. The company filed section 11 bankruptcy this April after laying off 131 employees without notice. Suniva, quick to place blame on anyone other than their own management, turned to the low costs of imported solar cells as a scapegoat, claiming that U.S. manufacturers are unable to compete with manufacturers overseas.
A “global safeguard” law was established in the 1974 Trade Act under Section 201 allowing temporary relief to industries where surging imports are proven to cause “serious injury”. On May 17th, 2017 Suniva filed a petition to the U.S. International Trade Commission (ITC) to conduct an investigation into whether imports of solar cells are causing serious injury to the United States solar manufacturing industry.
SolarWorld Americas Co-Signs Petition:
Suniva's Section 201 Petition gained momentum when SolarWorld, another bankrupt U.S. solar manufacturer, co-signed the petition on May 25th. Here are a few thing to not about petitioners Suniva and SolarWorld:
- Both are owned by larger companies overseas
- Suniva is owned by Shunfeng Int'l, a China based enterprise.
- SolarWorld Americas was a subsidiary of SolarWorld AG, a German company who filed for insolvency this May and proceeded to lay off 360 employees in Hillsboro, Oregon. SolarWorld Americas is now up for sale and under the jurisdiction of the insolvency administrator
- Both brought collapse of business on themselves
- They were unable to produce solar modules at the necessary rate for utility projects
- Utility-scale projects use 72-cell modules, which both businesses were unable to manufacture and supply at the necessary demand
- They left customers dissatisfied
- Both businesses developed high customer dissatisfaction with frequent complaints over late shipments, damaged products, and general product unreliability including subpar panel efficiency
- The businesses may have been stagnant in terms of technological advancements which are continually needed to compete with other sources of energy such as wind, natural gas, and thin-film solar.
- SQN Capital Management is the investment firm funding Suniva's Section 201 petition. Considering all of Suniva's losses, SQN is trying to sell off Suniva’s manufacturing equipment, equivalent to $55 million. In a letter to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, SQN said that if the assets are purchased- they will drop the solar trade case. PV Magazine described this letter as “an extortion letter”
- Sounds like Suniva's interest may not lie in the well being of U.S. solar cell manufacturers after all
- They were unable to produce solar modules at the necessary rate for utility projects
ITC Hearing on Injury:
After the Section 201 Petition was filed, the ITC began their investigation to determine whether or not foreign imports have caused injury to the U.S. domestic solar industry. If the ITC found no injury, the case would be thrown out. On August 15th, the ITC held its first, and only, public hearing on the trade case. The hearing basically had two sides: 1) Suniva + SolarWorld Americas (the petitioners), 2) The rest of the U.S. solar industry. Here's a summary of what each side had to say:
- A flood of imports has caused injury to the domestic PV cell industry
- U.S. manufacturers cannot profitably compete with the low cost of imports from Asia
- Placing tariffs on international cells and modules made with foreign cells will provide relief to domestic manufacturers
- The proposed remedy includes an evolving tariff and minimum import price for four years
The Rest of the U.S. Solar Industry:
- The tariffs requested would more than double the price of solar panels in the U.S. making solar energy unable to compete with the costs of other forms of energy
- Raising trade barriers will have no effect on U.S. cell and module manufacturer's ability to make
- Higher prices for solar products will cause a drastic drop in demand
- The threat to the U.S. solar industry at large greatly exceeds the fraction of business represented by the cell manufacturing sector
- The U.S. employs 260,000 people in the solar industry with services ranging from engineering to installation, financing, legal, consulting and beyond.
- The U.S. employs 38,121 people in solar manufacturing
- This number includes manufacturers of components extending beyond solar cells and modules to include other industry components like racking systems and inverters
- The cell manufacturing sector covered by the petition employs less than 1,000 people
- The Solar Energy Industries Association (SEIA) has determined that if the remedies sought by the petitioners are put into effect, the U.S. solar industry would lose 88,000 jobs next year alone.
ITC Votes 4-0 Injury is Found:
On September 22nd, the U.S. solar industry faced a devastating blow when the ITC voted in favor of petitioners Suniva and SolarWorld Americas. With four commissioners casting a vote, the final verdict came in 4-0 that "serious injury" was found. This means that after the investigation the ITC determined injury was caused to Suniva and SolarWorld from oversea solar module imports and the case will continue.
ITC Hearing on Remedies:
With the injury finding confirmed, the U.S. International Trade Commission has entered the second phase, determination of a remedy. The first, and only, hearing to discuss possible trade remedies will be on October 3rd in Washington, D.C. Whatever remedy the commission determines will be delivered to President Trump as a recommendation for action.
The proposed remedy by Suniva is worst-case scenario and we hope to see a much fairer solution arise. China's government has helped to bring down the cost of solar panels with cheap loans and other subsidies, but these lower prices have greatly benefited the U.S. and not the opposite. Looking at the whole solar economy the subsidies that were determined to cause injury to Suniva and SolarWorld have actually greatly benefited the rest of the industry.
ITC Reports Remedy to POTUS:
The ITC's recommendation is due to President Trump no later than November 13th. Ultimately the decision lies with the President to either accept the proposed remedy, adopt an alternative remedy, or impose no remedy at all.
Trump has reportedly been pushing for more tariffs on imported goods so it is important that we put pressure in opposition to these tariffs.
Deadline for Action by POTUS:
After the president receives ITC's recommendation, he has 60 days to issue his decision which makes January 12th, 2018 the deadline for action.
At this time it is very hard to predict how President Trump will conclude this exhausting case. He has reportedly been pushing for more tariffs on imported goods so it is important that we put pressure in opposition to these tariffs. The industry and its allies are making strong efforts to make an anti-tariff case to White House officials. Please join us in this opposition and read on to learn how you can help to fight the section 201 petition.
How Can I Fight the Section 201 Petition?
Since the ITC ruled that "serious injury" was found in the section 201 petition, the case will not end until it reaches President Trump's desk, so we must now turn to White House officials to make our anti-tariff case heard. You can help us put the pressure on the Trump administration by simply making your voice heard.
Contact Your Senator
Find your senator's phone number here and add it to your contact list. Call your senator today and keep calling to make sure your message is heard! Feel free to use our suggested script or just speak from your heart.
Hi, my name is _____ and I am a constituent of _____ State. I am calling to express my concern regarding the Section 201 Solar Trade Case which threatens the U.S. Solar industry. If this case results in increased tariffs it will destroy thousands of solar projects already in the development stage, completely stunt the development of new projects, and put 88,000 jobs at risk to industry workers. I urge you take a strong stand against increasing tariffs on solar imports.
We need as many people talking about this trade case as possible so we ask that you spark the conversation. The first step, of course, is being informed, so make sure to keep up to date as we reach these milestone dates, starting with the ITC hearing on remedies.
Follow UGE on social media to receive updates on the case- you can connect to any of our channels from the footer of this page.
Spread the Word
When you are done reading this post, send the link to your friend, then talk about it and keep talking about it! Share our social media posts on your account and become a spokesperson for saving the U.S. solar industry.
Written by: Brooke Ruggiero