"I want tariffs. And I want someone to bring me some tariffs."
October 18, 2017 9:11 AM   Subscribe

The US International Trade Commission has voted to proceed with a complaint filed by bankrupt solar manufacturer Suniva, joined by SolarWorld, under Section 201 of the 1974 Trade Act claiming imported cells and modules "caused significant harm" to US solar manufacturing. If ITC finds in Suniva's favor, they could vote to impose tariffs of $0.25/watt on cells , along with a floor price on modules of $0.74/watt.

The Solar Energy Industries Association (SEIA) expects that such tariffs could cost the industry 88,000 jobs, a third of the US solar industry workforce. Greentech Media predicts that, under Suniva's original complaint (which featured a $0.40/watt tariff, now revised to $0.25/watt), up to two thirds of US solar installations could be halted through 2022. US thin-film module manufacturer First Solar, meanwhile, has expressed support for the Suniva case.

The Potential Impact in 12 Charts: Tariff risk has caused module prices to increase, a phenomenon unique to the US.

Source for the post title.
posted by Existential Dread (41 comments total) 7 users marked this as a favorite
 
I'm such a bad person--I'm pro-solar, pro-anything-trying-to-get-us-away-from-fossil-fuels, but the thought of Elon Musk's BP ticking up one or two points on this news is not entirely displeasing to me.
posted by praemunire at 9:44 AM on October 18, 2017 [5 favorites]


Yeah, that is pretty petty, I'm glad you recognize it.
posted by thedaniel at 9:44 AM on October 18, 2017 [13 favorites]


It turns out I'm a complex person.
posted by praemunire at 9:49 AM on October 18, 2017 [15 favorites]


Yeah, I'm super torn - on the one hand it did feel like China started dumping just as the domestic industry was starting to stand up, on the other hand I want solar to be cheap and ubiquitous and I'm not sure I really care who sources the hardware that makes that happen? I mean at the root of it, if it's just a short term price disruption but we're back to the status quo within a year and we end up with both a thriving domestic solar manufacturing and power industry, sure, great. But if the tariff just manages to strangle the nascent industry in the crib, yaaay well done protectionism.

(And who knows, maybe it was just that China was a year or two ahead of us in production capacity and c'est la vie - c'mon guys perhaps we need to try taking some risks again? Sometimes the result is that you get to dominate a market for a few years.)
posted by Kyol at 9:54 AM on October 18, 2017 [1 favorite]


so, this is 'big coal' getting back at...uh...the world?
posted by From Bklyn at 10:01 AM on October 18, 2017 [1 favorite]


The tariffs that can be levied under this law are short term (though subject to renewal) and solar cell fabs are expensive with long lead times. I don't see anyone building more of them based on this. It's just going to delay a load of projects that are barely profitable at the current price and probably bankrupt a bunch of installers.
posted by rhamphorhynchus at 10:03 AM on October 18, 2017 [3 favorites]


Ole Muskie's got a fab under construction in New York, so I don't think this'll affect his blood pressure too much.
posted by rhamphorhynchus at 10:03 AM on October 18, 2017


This sounds great! So we'll be putting a tariff on fossil fuel imports as well to keep things fair?
posted by miyabo at 10:08 AM on October 18, 2017 [10 favorites]


This sounds great! So we'll be putting a tariff on fossil fuel imports as well to keep things fair?

We pay for that one with souls.
posted by zippy at 10:14 AM on October 18, 2017 [5 favorites]


I remember there was some talk of the cheaper Chinese PV modules degrading and failing faster than domestic products, but I can't find any real tests or figures to back that up, so it may just be xenophobia/protectionism.

The tarriff numbers stated are what the plantiffs are asking for; it doesn't seem to me that the ITC would actually set them that high?
posted by phooky at 10:18 AM on October 18, 2017


So this is a Chinese and a German owned company who made a go at manufacturing panels in the US levying this complaint to the chagrin and detriment of US owned companies who get their panels manufactured in China? Am I reading that right?
posted by Zalzidrax at 10:22 AM on October 18, 2017 [5 favorites]


this is 'big coal' getting back at...uh...the world?

I don't think it's just that.

This, like the on-going NAFTA trainwrck, is another indication that Trump is nothing more than a strong protectionist. It's becoming clear that he does not deal in good faith as a trading partner, no that he can be trusted by his partners an allies to do the right thing. See also the aerospace trade war he's fanned between Boeing and Canada and the UK, which I am sure has gone about as badly for Boeing as possible by now.

So it's not just "big coal", it's Trump, again, significantly mis-understanding how the world works and demanding ill-thought "solutions". Of course, he'll likely be gone by the time the problems he's caused start to bite. But everyone else will pay dearly.
posted by bonehead at 10:27 AM on October 18, 2017 [4 favorites]


SEIA has argued that the level of tariffs that Suniva is asking for is illegal. They've got an alternative remedy that creates a license fee system on importing CSPV cells and modules that goes straight to American solar manufacturers. Support local manufacturing by giving them money. Simple. It's not like the US government doesn't subsidize the fossil fuel industry.

These tariffs really are upsetting to me... the cost of building new solar has come down tremendously because of China's manufacturing capacity. It has become cost competitive with coal in many places in the US. We can't afford to screw around with this sort of stuff if the world is to have any chance at avoiding the worst effects of global warming.
posted by Mister Cheese at 10:29 AM on October 18, 2017 [12 favorites]


Yes, subsidies handle this. Also, we need to end the subsidies for fossil fuel and start taxing them.

I'd love it if Suniva's legal action winds up costing them whatever financing they currently have, like their only environmentally conscious investors launching shareholder lawsuits against their management.
posted by jeffburdges at 11:51 AM on October 18, 2017


The US is only 10-15% of the global market for solar. We don't need to care about you.

The rest of the world will carry on with a competitive market leading to better panels and cheaper prices. If the Yanks don't want to be part of that, well, that's their problem.

(Obviously, apart from the bit where you desperately cling on to your addiction to coal and oil, resulting in the destruction of our climate and continued wars over oil in the Middle East...)
posted by happyinmotion at 12:10 PM on October 18, 2017 [5 favorites]


The US is only 10-15% of the global market for solar. We don't need to care about you.

Who's we? And what do you mean by care? The impacts of these tariffs have potential to devastate the US solar market, not derail the global market. It's clear that globally solar will continue to take off, and that dropping solar module prices are a strong benefit to expansion of renewables and decarbonization of the energy sector.

10-15% is still hundreds of millions or billions of dollars. Somebody cares about markets of that size. Many states have a lot invested in renewables, and a tariff wouldn't serve those states well, no matter what our protectionist federal government thinks. And despite the paeans to coal by Trump and his goons, coal jobs are still disappearing and coal usage is still dropping.
posted by Existential Dread at 12:37 PM on October 18, 2017


Who's we?

I interpreted the poster to be referring to those of us who live outside America.

We call ourselves Non-Americans, and our population is distributed across vast regions such as the Not American Republic, the Federated States of Not America, the Non-American Commonwealth, and scattered colonial holdings including smaller territories like Ne America Pas Island. Collectively these jurisdiction are often called “the rest of the world.”

We also have solar panels.
posted by Construction Concern at 3:20 PM on October 18, 2017 [7 favorites]


Indeed. And these tariffs are unlikely to impact you in a significant way, which is why I wondered about the point of a comment that basically says 'not our problem.'
posted by Existential Dread at 3:30 PM on October 18, 2017


Well, anything that retards our progress on reducing carbon and methane emissions has global implications.
posted by wierdo at 4:24 PM on October 18, 2017 [3 favorites]


As someone who works in the solar industry, has for a long time, and loves loves loves solar: the Chinese government was pretty obviously supporting dumping panels at the huge cost of manufacturers elsewhere. They provided direct government financing of fabs (last I saw they were up to 300+ billion yuan, about US$50B!). They provided massive regulatory support (either directly or indirectly through pressure on banks and provincial governments). Panel fab projects were classified as strategic projects and thus received huge loan guarantees and tax breaks.

All of which helped drive the price of solar panels way, way down. This is an unvarnished short-term gain for global climate change. Solar projects that were unthinkable ten years ago now happen as a matter of course because the panels are so darned cheap.

This does nothing to diminish the fact that a lot of people lost their jobs and a lot of solar projects failed because China was illegally subsidizing panel exports. Were this nearly any other industry, people would be up in arms about the unfair bullying of it.

Both of these things can be true. Yay and boo. :(
posted by introp at 4:48 PM on October 18, 2017 [11 favorites]


I suppose what I'm really mad about, though, is that Bush II and congress under Obama didn't support our homegrown solar industries in a similar way. We had some of the best and brightest but the US government wouldn't listen to the cries of unfair competition and kick in their own money. When we tried, perfectly normal failures like Solyndra were treated like scandals because congress wanted anything they could pin on Obama. Oh no, the government lost $500M in loan guarantees because such tiny subsidies couldn't compete with the flood of Chinese subsidies! Panic! Anyway... a lot of those smart folks moved to where the solar fab jobs are and they won't be back any time soon. :(
posted by introp at 4:52 PM on October 18, 2017 [4 favorites]


Protectionism is the economic manifestation of nationalism. All that needs to be said.
posted by forgettable at 5:27 PM on October 18, 2017 [2 favorites]


"I want tariffs. And I want someone to bring me some tariffs."

Reminded me of this: "I am the Emperor, and I want dumplings!"
posted by e-man at 8:23 PM on October 18, 2017


Here in Britain, coal generated 23% of electricity in July 2015. In July 2016, it was 4%.

It's a bit odd to look at a single month rather than the whole year. The graph on pg. 6 of the annual report for 2015 shows coal 22% + gas 30% = 52% of total production. Biofuels make up another 2.8%. During the boom of the 90s the Britain rapidly replaced coal with natural gas and the trend seems to continue. The big hope of the last decade was offshore wind, but solar lags far behind.

I don't want to pick on this too much but I've been noticing posts and videos on social media with feelgood news about renewable energy that seems, well fake.
Eg. a widely shared video for Germany claiming that on a single summer day last year, renewables met 100% of the country's demand. Even granting this dubious claim, the fact is the Germany uses 42-46% coal and is even more dependent due to the nuclear phaseout.
posted by tirutiru at 8:38 PM on October 18, 2017


Bush II and congress under Obama didn't support our homegrown solar industries in a similar way. We had some of the best and brightest but the US government wouldn't listen to the cries of unfair competition and kick in their own money.

I think you may not fully appreciate the scale of the subsidies that were offered to the solar industry on the individual purchaser level. A 30% tax credit for individuals installing solar panels on their homes!!! Which ended up being captured and essentially sold off to the banks by, among others, that quality industry player SolarCity, at the time run by Musk's cousin. And then New York dumped $750 million into SC's Buffalo manufacturing facility, which has turned out to be quite the bust.
posted by praemunire at 9:41 PM on October 18, 2017 [1 favorite]


Ole Muskie's got a fab under construction in New York, so I don't think this'll affect his blood pressure too much.

Yeah...uh...that turns out not to be doing so hot so far.
posted by praemunire at 9:43 PM on October 18, 2017




This sounds great! So we'll be putting a tariff on fossil fuel imports as well to keep things fair?
posted by miyabo at 10:08 AM on October 18 [9 favorites −] Favorite added! [!]


if you're talking about the US, aren't we an oil exporter now? that would explain all the new storage facilities and pipelines racing around the country, trying to get the fracked oil out of the US
posted by eustatic at 10:23 PM on October 18, 2017


...Maybe it was just that China was a year or two ahead of us in production capacity.

Applies to literally any significant manufacturing today, for reasons both benign and upsetting.
posted by rokusan at 10:28 PM on October 18, 2017


praemunire: Well yeah, that's because manufacturing cells in the US is a dumb idea. As a hedge against tariffs, though, it's maybe close enough to running to look clever.
posted by rhamphorhynchus at 4:01 AM on October 19, 2017


the fact is the Germany uses 42-46% coal and is even more dependent due to the nuclear phaseout.

Installed net power generation capacity in Germany 2002-2017


2002: 49GW coal, 20GW gas, 5GW oil, 22GW nuclear
2017: 49GW coal, 30GW gas, 4GW oil, 11GW nuclear

So it's primarily gas, not coal, that's been replacing nuclear in Germany. And I'm not really seeing how you can claim that Germany is now "even more dependent" on coal, given that over the same period installed solar capacity has grown from 0.3GW to 42GW and wind from 12GW to 52GW.

More charts
posted by flabdablet at 5:21 AM on October 19, 2017 [2 favorites]


Lawks — feels like 2012 again, when there was the same threat from US tariffs. If you have a big enough pipeline, any module manufacturer will set up a encapsulation/fab plant near you to get modules for roughly the same price as shipped from China. Module fab, unlike cell/wafer fab, is not capital intensive, and can be shipped in and out as needed. Witness the tens of thousands of module fab jobs that we had in Ontario while we had FIT. They've all gone with the availability of new contracts.

Oddly, a whole bunch of Ontario projects were built with US-made cells. The market was skittish about US tariffs through to about 2015, and many manufacturers thought they were permanently on the verge of big US orders, so they used some of the fat in the FIT contract pricing to buy US mono-Si wafers. Canadian-encapsulated modules were tariff-exempt (yay nafta) so it all seemed like a good idea at the time.

Hadn't thought about FirstSolar, aka "Cadmium Superfund Sites of the Future", in years …
posted by scruss at 8:10 AM on October 19, 2017


if you're talking about the US, aren't we an oil exporter now?

No, but the net imports is a smaller fraction of total US usage than they were ten years ago. There has been a lot more home production, some for export, which might explain the increased activity you have seen.
posted by biffa at 8:13 AM on October 19, 2017


I think you may not fully appreciate the scale of the subsidies that were offered to the solar industry on the individual purchaser level. A 30% tax credit for individuals installing solar panels on their homes!!! Which ended up being captured and essentially sold off to the banks by, among others, that quality industry player SolarCity, at the time run by Musk's cousin. And then New York dumped $750 million into SC's Buffalo manufacturing facility, which has turned out to be quite the bust.
Totally aware. But that underscores my point: subsidies for solar installation or use are subsidies for panel and inverter makers, installers, BOS providers, and financers. We are subsidizing China's already-subsidized manufacturers!

And, hey, if that's a strategic choice we wanted to make, great. And, to be honest, I do think subsidized install and use are a choice we want to make. Those are the sort of early-mover subsidies that have historically had the biggest impact in getting the change we want. But we balked at trying to make things fair for all manufacturers and thus let our apparent technological and research edge essentially evaporate. We were never going to be able to compete in terms of labor costs, etc., but like in a lot of other industries we might have been able to compete in terms of innovation and creativity. (The US is still an amazingly strong exporter of sophisticated machinery and electronics.)

It's no coincidence that the Chinese solar industry went on a world-wide hiring spree as they were driving everyone else out of the business. (Of course, it's hard to figure out cause and effect there.) The Chinese government has declared that solar engineering and manufacturing, not just cell fabs, are a national goal of strategic importance.
posted by introp at 8:13 AM on October 19, 2017 [1 favorite]


I don't want to pick on this too much but I've been noticing posts and videos on social media with feelgood news about renewable energy that seems, well fake.

My twitterfeed is almost entirely renewables based, I see a lot of positive stories, I think they sometimes tend to be selective rather than fake, ie you have to understand the implications of what some of them claim to be able to parse them accurately and this is often not straightforward. So potentially misleading rather than not true.
posted by biffa at 8:18 AM on October 19, 2017


We were never going to be able to compete in terms of labor costs, etc., but like in a lot of other industries we might have been able to compete in terms of innovation and creativity.

As I understand it, Qualcomm may design in San Diego, but they fab overseas, for the most part. Labor and production costs are what require the subsidies, not the being clever. (And, honestly, "innovation and creativity!" offered as generic solutions to problems get the side-eye from me. What was this innovation and creativity going to do, when the technology has been steadily improving and getting more cost-effective throughout the past decade or so?)

I guess I don't really understand your point here. The subsidies to end users significantly bolstered a market that otherwise might have been smaller. U.S. manufacturing companies nonetheless failed to compete in, or even largely enter, that market. You can't simultaneously complain about tariffs on imports and ask for direct subsidies to domestic companies too inept to figure out how to capture a market subsidy. They're two sides of the same protectionist coin. And look how they tend to turn out in less-controlled economies: my tax dollars are presently subsidizing the Riverbend facility and getting bleep-all for it. How much more money do you want to directly hand to Musk and his ilk in the hopes that they won't simply rip us all off?
posted by praemunire at 9:19 AM on October 19, 2017


Musk has an ilk?
posted by flabdablet at 9:42 AM on October 19, 2017 [1 favorite]


What was this innovation and creativity going to do, when the technology has been steadily improving and getting more cost-effective throughout the past decade or so?

There are some examples in this Imperial College London assessment of potential for further innovation in the global PV sector.

(Though I take your general point, its often not a well thought through plan for a country which isn't up to speed in a sector to be able to get its companies to just step on to the moving train.)
posted by biffa at 11:30 AM on October 19, 2017


I think they sometimes tend to be selective rather than fake, ie you have to understand the implications of what some of them claim to be able to parse them accurately and this is often not straightforward. So potentially misleading rather than not true.

I finally found the video I was talking about. Take a look and tell me if it's just potentially misleading. It starts with the claim that "[Germany] got 93% of its power from renewables" and then flashes "...over a single period last weekend" next slide*. There was a related slew of articles about a certain hour when unit prices turned negative - apparently because solar and wind are pumping out so much power... You'd have to be a pretty determined layman to puzzle through what that means, and why it isn't really a huge coup for the environment. Compounding the offence is the fact that most experts ignore this kind of hyperbole, so the only criticism comes from people who do have a vested interest eg. petroleum and gas consultants.

*blatant case of 'Ashwatthama is slain, whether man or elephant'
posted by tirutiru at 4:59 PM on October 19, 2017


The Chinese government has declared that solar engineering and manufacturing, not just cell fabs, are a national goal of strategic importance.

Sounds really fucking smart. And if that is their priority, it only makes sense to subsidize manufacturing and do all the other stuff described above.

So the complaint from the point of the US is that China is playing too smart, too much thought for the future?
posted by Meatbomb at 1:00 AM on October 29, 2017 [1 favorite]


PV Magazine is reporting that USITC is recommending tariffs, quotas, and licensing fees, differing by commissioner. Looks like the recommended tarriffs are for less than Suniva and SolarWorld request depending on what year they're based on (possibly 10-cents-per-watt). According to GreenTech Media this could potentially lead to a 10.1% decrease in Utility Solar installations 2018 through 2022. So not worst case scenario.

However, these are just recommendations. The president ultimately gets to decide the form of the trade action.
posted by Mister Cheese at 9:32 AM on October 31, 2017


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