The Future of American Solar Manufacturing

(Image courtesy of SolarWorld Americas.)

Here’s the problem with the “Buy American, Hire American” philosophy: American companies aren’t all on the same team, even when they work in complementary areas of the same industry. The current controversy regarding imports of Chinese solar cells is a prime example.

Suniva, a now-bankrupt manufacturer of solar cells and modules filed a petition with the U.S. International Trade Commission (ITC) in April calling for new tariffs on solar cells and minimum prices on solar modules imported into the U.S.

The Georgia-based company requested duties of $0.40/watt on imported cells and a floor price of $0.78/watt on modules. Ironically, Suniva is majority-owned by the Chinese company Shunfeng International Clean Energy.

In a further twist, SolarWorld Americas, a subsidiary of the German company SolarWorld AG, joined the complaint a month later, after the ITC agreed to launch an investigation to “determine whether crystalline silicon photovoltaic (CSPV) cells (whether partially or fully assembled into other products) are being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported articles.”

It’s worth noting that SolarWorld Americas’ German parent had also recently filed for insolvency.

Opposition to Tariffs on Solar Imports

GameChange Solar argues that steel workers’ jobs in the Midwest are threatened by an ITC petition filed by Suniva and SolarWorld. (Image courtesy of GameChange Solar.)

At first glance, this situation is similar to the one faced by U.S. steelmakers, who have filed petitions against Chinese imports in response to layoffs in the steel industry resulting from the massive quantities of Chinese steel that have been flooding the global market.

The crucial difference is that the steel industry is effectively homogenous in terms of its position in the supply chain. The solar industry is significantly more diverse, which is why GameChange Solar, another American solar manufacturer, has voiced serious concerns regarding the ITC case.

GameChange Solar manufacturers fixed tilt and solar racking systems for roof and ground mount solar farms. Coincidentally, the company boasts that its structures are made primarily with U.S. steel—300 million pounds of it in 2017.

“The surging growth in homegrown American manufacturing is threatened by the petition filed by Chinese-owned Suniva and German-owned SolarWorld at the International Trade Commission,” reads a statement from the GameChange Solar. “These two failed foreign-owned companies, after surviving only from US government subsidies, are now asking for the US government to step in and set the price of solar panels at more than double the current market price.”

The drop in solar panel prices over the last five years has resulted in a rapid increase in solar manufacturing jobs in America. (Image courtesy of GameChange Solar.)

GameChange Solar has pointed out that jobs in the solar industry are growing at the fastest rate in the country—12 times as fast as the rest of the national economy, according to a report earlier this year from EDF Climate Corps. GameChange Solar attributes this surge to the rapidly dropping costs of solar power, which the company believes will be severely hampered if the ITC accedes to Suniva and SolarWorld Americas’ petition.

This isn’t the only voice of dissent. In an interview with PV Magazine, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) said, “The Section 201 petition is a blunt instrument in that it can damage our entire industry with no guarantee of helping Suniva or other manufacturers achieve national and global competitiveness.”

The Future of U.S. Solar Manufacturing

SEIA has predicted that the Section 201 petition could cost 88,000 American solar manufacturing jobs and GameChange Solar has suggested that it could threaten most of the 374,000 total jobs in the solar industry.

Bringing more manufacturing jobs to America was one of the principal planks of Donald Trump’s presidential campaign, so this is an issue that’s certainly worth his attention.

So, what should President Trump do?

(Image courtesy of GameChange Solar.)

On the one hand, it’s easy to see this petition in the same light as GameChange Solar: a petty move by two foreign-owned companies that couldn’t hack it in the U.S. market. However, both companies are also responsible for creating manufacturing jobs in America.

If the basis of the Section 201 petition is right and it’s simply not possible for American-made solar cells and modules to compete against Chinese imports, then perhaps tariffs and floor prices are the best way to avoid losing more American solar manufacturing jobs in the long run. That is, of course, assuming that such restrictions wouldn’t slow the growth of the American solar industry overall.

GameChange Solar’s plea to President Trump highlights the fact that the solar industry is made up of more than just OEMs. The consequences of the ITC’s decision will be felt throughout the supply chain, with far reaching implications for the future of American renewable energy.

Who knew trade could be so complicated?

Share your thoughts on the future of the American solar industry in the comments below.