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How Tariffs Could Help And Hurt The Solar Industry

Oct 30, 2017
Originally published on December 19, 2017 10:12 am

This story comes from Colorado Public Radio and Oregon Public Broadcasting.

The U.S. solar industry is booming, in large part because of cheap, imported solar panels. But a U.S. trade commission says those imports also hurt manufacturers here. It's offering recommendations to President Trump on how to repair that damage, but the industry is divided over whether any remedy would do more harm than good.

SolarWorld, outside Portland, Ore., is one of two manufacturers which brought the trade suit. At its plant, robots do much of work of building solar cells into panels.

"They're picked up, put on this belt," says John Clason, as he loads stacks of solar cells the size of large drink coasters into the automated machines. "These panels we're making now are just about 300 watts each."

But SolarWorld is having trouble competing with imports, mainly from Asia, that it alleges are being sold at below-market prices in violation of trade rules. Earlier this year, SolarWorld Americas' parent company declared bankruptcy and laid off more than 300 workers, including Clason.

"That was when we knew something was amiss," he says. "Nobody really knew how deep the cuts were going to go."

SolarWorld and another manufacturing company, Suniva, want tariffs and quotas on all the solar panels coming in from overseas, saying it would level the playing field.

"These are the last two surviving companies," says Tim Brightbill, the lawyer representing SolarWorld in the case. He blames Chinese subsidies for overproduction, and says without tariffs, what's left of solar manufacturing in the U.S. could disappear.

"We documented more than 30 U.S. solar cell and module manufacturers who were driven out of business in the last five years," he says.

A few weeks ago, the U.S. International Trade Commission ruled in SolarWorld's favor. The company hired Clason and others back to work, and now says it plans to rehire 200 workers by May.

"I can't overstate how crazy and chaotic things are."

But the prospect of trade protections that could double the price of imported solar panels is having a very different impact on other parts of the U.S. solar industry.

The vast majority of American solar jobs are not from making panels, but from installing them. There are also a host of ancillary companies that make wires, batteries, and electrical equipment.

Chad Parsons, with Ecolibrium Solar, which makes racking for solar panels, and says he's noticing fewer orders.

"I think the biggest challenge for us is not understanding what's going to happen," he says. That is "causing our customers to be concerned, to pull back on their orders."

Ecolibrium joined a protest letter to the Trade Commission. Dan Whitten with the Solar Energy Industries Association says most of the U.S. industry opposes tariffs on imported panels.

"There will be widespread job loss, certainly a loss of tax revenue in communities where solar is going strong," he says. Whitten says trade protections could cost solar its competitive position against natural gas and wind.

Namaste Solar in Boulder is also seeing its business hurt. "I can't overstate how crazy and chaotic things are in the industry right now," says co-founder Blake Jones.

At the company's warehouse, where huge pallets of panels are lifted two stories, Jones says he has 10 long-term, larger projects stuck in limbo. And he says all the uncertainty is pushing up the price of solar panels. Namaste has started stockpiling them, in case prices go up even more.

"We're eating those costs," he says, but eventually they could be passed on to customers.

The International Trade Commission merely recommends certain trade protections, and how tough to make them. Its final report is due by mid-November. After that, President Trump will have the final decision on whether to impose any barriers, and what kind.

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MARY LOUISE KELLY, HOST:

The U.S. solar industry is booming. And in large part, that's because of cheap, imported solar panels. But the U.S. International Trade Commission recently ruled those imports also hurt American manufacturers. Tomorrow the commission will advise President Trump on how to fix that. In a moment - the concerns over possible tariffs or quotas. First, Cassandra Profita of Oregon Public Broadcasting visits one of the companies that brought the trade case.

CASSANDRA PROFITA, BYLINE: At the SolarWorld plant outside Portland, robots do much of the work of building solar cells into panels.

JOHN CLASON: So the solar cells are in a carrier here. They're picked up. They're put on this belt.

PROFITA: John Clason loads stacks of solar cells the size of large drink coasters into the automated machines.

CLASON: These panels that we're making right now are just about 300 watts each.

PROFITA: Those panels can't compete with a surge of cheap solar panel imports SolarWorld says are being sold at below market prices that violate trade rules. Earlier this year, SolarWorld declared bankruptcy, and Clason was laid off along with more than 300 other workers at the factory.

CLASON: That was when we knew that something was amiss. And nobody knew exactly how deep the cuts were going to go.

PROFITA: SolarWorld and another manufacturing company, Suniva, want tariffs and quotas on all the solar panels coming in from overseas. They say it would level the playing field.

TIM BRIGHTBILL: These are the last two surviving companies.

PROFITA: Tim Brightbill is the lawyer representing SolarWorld in the case. He blames Chinese subsidies for overproduction. And he says without tariffs, what's left of solar manufacturing in the U.S. could disappear.

BRIGHTBILL: We documented more than 30 U.S. solar cell and module manufacturers who were driven out of business over the last five years.

PROFITA: A few weeks ago, the Trade Commission ruled in SolarWorld's favor, and Clason got called back to work.

CLASON: On my caller ID, I saw my lead man's name. And I went, wow, what's - you know, what's he want? And he said that they were ramping up again. And was I going to be interested in coming back? And I said, yeah, absolutely.

PROFITA: With the possibility of tariffs helping SolarWorld compete with imports, the company plans to rehire 200 workers by May.

GRACE HOOD, BYLINE: I'm Grace Hood with Colorado Public Radio. Here, the prospect of those tariffs is having a very different impact. The vast majority of solar jobs in the U.S. industry are not from making solar panels but installing them. Other companies make wires, batteries and electrical equipment. Chad Parsons is with Ecolibrium Solar, which makes racking for panels. He's noticed fewer orders.

CHAD PARSONS: I think the biggest challenge for us is not understanding what's going to happen, what that remedy is going to be, which is causing our customers to be concerned, to pull back on their orders.

HOOD: Ecolibrium joined a protest letter to the Trade Commission. Dan Whitten with the Solar Energy Industries Association says most of the U.S. industry opposes tariffs on imported panels.

DAN WHITTEN: There'll be widespread job loss, certainly loss of tax revenue in communities where solar's going strong. And you know, we have to compete with natural gas and wind, and our competitive position's going to be hurt.

HOOD: At Namaste Solar's warehouse in Boulder, huge pallets of panels are lifted two stories into the air. Co-founder Blake Jones says all this uncertainty is pushing panel prices upwards. Namaste is stockpiling panels in case prices go up even more.

BLAKE JONES: For us, we're eating those costs.

HOOD: But he says eventually customers could pay more. Jones says he has 10 long-term larger projects stuck in limbo. Nobody knows where prices are headed.

JONES: I can't overstate how crazy and chaotic things are in the industry right now.

HOOD: This week, the International Trade Commission will offer its recommendations in the case. But President Trump will have the final decision on whether to impose any trade barriers and what kind. For NPR News, I'm Grace Hood in Colorado. Transcript provided by NPR, Copyright NPR.