Solar Power Death Wish

  • Date: 17/09/17
  • Editorial, The Wall Street Journal

Billions of dollars in taxpayer subsidies haven’t made the U.S. solar industry competitive, and now two companies want to make it even less so. Suniva Inc., a bankrupt solar-panel maker, and German-owned SolarWorld Americas have petitioned the U.S. International Trade Commission (ITC) to impose tariffs on foreign-made crystalline silicon photovoltaic cells.

Solar cells in the U.S. sell for around 27 cents a watt. The petitioners want to add a new duty of 40 cents a watt. They also want a floor price for imported panels of 78 cents a watt versus the market price of 37 cents. In other words, they want the government to double the cost of the main component used in the U.S. solar industry. Solar electricity prices could rise by some 30% if the ITC says they’ve been injured by foreign competition—a decision is due by Sept. 22—and the Trump Administration goes along with the tariff request.

U.S. manufacturers won countervailing and antidumping duties against imports from China and Taiwan in 2012 and in 2015. But now they’re resorting to Section 201 of the Trade Act of 1974 because they don’t need to show they are victims of dumping or foreign government subsidies. They only need to show that imports have harmed them.

The harm is real but that’s due to changes in the marketplace. The U.S. solar industry has discovered that its comparative advantage lies not in making panels, a basic product, but in adding value to imported cells and modules. This involves making and installing racking or framing systems and incorporating innovations like trackers that orient toward the sun.

To turn sunshine into energy requires inverters that translate the energy captured on a solar panel into something that can be sent on the electrical grid. While there are fewer than 1,000 jobs in U.S. panel manufacturing, some 260,000 jobs rely on access to imported panels.

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