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US solar industry fights threat of new import tariffs

The Financial Times logo The Financial Times 8/13/2017 Ed Crooks
Solar panels stand at the Enbridge Inc. Sarnia Solar Farm in Sarnia, Ontario, Canada, on Friday, July 21, 2017. The Sarnia Solar Farm, which became fully operational in the fall of 2010, was at the time one of the largest photovoltaic solar farms in the world. It was also Enbridge's first ever foray into solar energy, costing $400 million. Photographer: James MacDonald/Bloomberg© Bloomberg Solar panels stand at the Enbridge Inc. Sarnia Solar Farm in Sarnia, Ontario, Canada, on Friday, July 21, 2017. The Sarnia Solar Farm, which became fully operational in the fall of 2010, was at the time one of the largest photovoltaic solar farms in the world. It was also Enbridge's first ever foray into solar energy, costing $400 million. Photographer: James MacDonald/Bloomberg

US solar power companies will this week be battling over threatened new tariffs on imported panels that the industry has said could bring growth to a halt and cost tens of thousands of jobs.

The US International Trade Commission will on Tuesday hold hearings in its investigation of the market for silicon photo-voltaic cells and panels, brought following a complaint from Suniva, a Georgia-based manufacturer that went into bankruptcy in April.

The Solar Energy Industries Association (SEIA) hopes to have hundreds of workers outside the hearing, to give a sense of the jobs that could be lost in activities such as installation, system design and the manufacturing of components if the price of panels is increased by new duties.

Suniva has argued that it and other US manufacturers have suffered serious injury because of a surge in imports, and is seeking a tariff of 40 cents per watt and a minimum price of 78 cents per watt for foreign panels, which would roughly double their cost in the US.

It has been supported by Solarworld, a German company with US manufacturing operations, which went into bankruptcy in May.

SunPower, the US solar business majority owned by Total of France, filed a joint brief with the SEIA, arguing that “the real causes of any harm suffered by the domestic industry are self-inflicted” because as demand boomed they were unable to produce enough of the larger 72-cell panels used for utility-scale projects. Tom Werner, SunPower’s chief executive, will be giving evidence at Tuesday’s hearing.

Companies that have made submissions to the commission include SunPower, NextEra Energy, the Florida-based utility group, AES, the power generator, and Hanwha Q-Cells, the South Korean manufacturer.

Suniva argues in its brief that the legal issues are clear-cut, and a decision in its favour would pave the way for tariffs to permit US solar manufacturing to “become competitive, rehire the thousands of American workers who have already lost their jobs, and reopen shuttered plants.”

However, a bipartisan group of 16 senators and 53 members of the House of Representatives on Friday sent letters to the commission arguing against Suniva’s case, on the grounds that “increasing costs will stop solar growth dead in its tracks”.

The cost of solar power has been plunging, making it increasingly competitive against fossil fuels, but steep new import duties would reverse some of those gains in the US.

The investigation, held under the rarely-used Section 201 of the 1974 Trade Act, is an early test of the Trump administration’s trade policy.

The ITC is scheduled to give a decision on September 22 on whether solar imports have been a “substantial cause” of “serious injury” to US manufacturing. If it concludes that they have, it will propose remedies to President Donald Trump by November 13, and he then has until January 12 next year to decide how to respond.

Sales of solar panels from China and Chinese companies have already been hit by US import duties, but tariffs under Section 201 would apply to imports from anywhere in the world.

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