US slaps heavy duties on solar equipment imports

The Trump administration is imposing tariffs up to 30% on imports of solar equipment. 

The measure is aimed directly at China, who has been dumping cheap, subsidized solar panels on the U.S. for a decade.  The U.S. had imposed anti-dumping tariffs, but China got around them by opening subsidized factories in Vietnam, Malaysia, and other Asian countries.

The $28-billion U.S. solar industry is up in arms over the new tariffs, since about 80% of parts come from overseas.  But the goal here is to jump-start the expansion of U.S. manufacturing of solar panels.

Bloomberg:

"We are inclined to view it as posing greater trade risk for all types of energy, particularly if other nations establish new trade barriers against U.S. products," Washington-based research firm ClearView Energy Partners LLC said Monday.

U.S. panel[-]maker First Solar Inc. jumped as much as 9 percent to $75.20 in after-hours trading in New York.  The Tempe, Arizona-based manufacturer stands to gain as costs for competing, foreign panels rise.

Just the threat of tariffs shook solar developers in recent months, with some hoarding panels and others stalling projects in anticipation of higher costs.  The Solar Energy Industries Association projected 23,000 job losses this year in a sector that employed 260,000.

Trump approved four years of tariffs that start at 30 percent in the first year and gradually drop to 15 percent.  The first 2.5 gigawatts of imported solar cells are exempt for each year.

The duties are lower than the 35 percent rate the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers.  The idea behind the tariffs is to raise the costs of cheap imports, particularly from Asia, and level the playing field for those who manufacture the parts domestically.

"This is not a goodbye for renewable energy in the U.S.," Fatih Birol, executive director of the International Energy Agency, said at the World Economic Forum in Davos, Switzerland.  "I don't believe [that] this decision will reverse the solar expansion in the U.S.  The global solar industry will adjust.  The penetration of solar in the U.S. will continue."

First Solar is the largest of a handful of panel[-]makers left in the U.S. after most of the industry migrated to China in the past decade.  That means [that] the major impact of the duties will be on panel[-]installers, which get most of their supplies from Chinese companies.

More than half of U.S. solar imports come from China (8%), Vietnam (9%), and Malaysia (36%).  Those who oppose the tariffs don't dispute that subsidized imports are hurting U.S. solar manufacturers, but it harms the goal of vastly expanding renewable sources of energy.  In short, we should go green even if it means the loss of tens of thousands of jobs.

The folly of that thinking is that Chinese dumping has already largely destroyed the solar industry in America.  Tariffs will help level the playing field for the survivors and will probably spur the creation of new solar ventures.

China is by far the largest manufacturer in the world of solar equipment.  Why not, when the government heavily subsidizes the companies making it?  The question is, should U.S. or any other solar manufacturers in the world be forced to compete with companies located in China or owned by the Chinese government that can afford to sell the equipment below cost because of the massive loans given them by Chinese banks?

In a word, it's unfair.  And the tariffs, which may hurt some American companies in the short term, will present opportunities for other companies to get in the solar game. 

Creative destruction, anyone?

The Trump administration is imposing tariffs up to 30% on imports of solar equipment. 

The measure is aimed directly at China, who has been dumping cheap, subsidized solar panels on the U.S. for a decade.  The U.S. had imposed anti-dumping tariffs, but China got around them by opening subsidized factories in Vietnam, Malaysia, and other Asian countries.

The $28-billion U.S. solar industry is up in arms over the new tariffs, since about 80% of parts come from overseas.  But the goal here is to jump-start the expansion of U.S. manufacturing of solar panels.

Bloomberg:

"We are inclined to view it as posing greater trade risk for all types of energy, particularly if other nations establish new trade barriers against U.S. products," Washington-based research firm ClearView Energy Partners LLC said Monday.

U.S. panel[-]maker First Solar Inc. jumped as much as 9 percent to $75.20 in after-hours trading in New York.  The Tempe, Arizona-based manufacturer stands to gain as costs for competing, foreign panels rise.

Just the threat of tariffs shook solar developers in recent months, with some hoarding panels and others stalling projects in anticipation of higher costs.  The Solar Energy Industries Association projected 23,000 job losses this year in a sector that employed 260,000.

Trump approved four years of tariffs that start at 30 percent in the first year and gradually drop to 15 percent.  The first 2.5 gigawatts of imported solar cells are exempt for each year.

The duties are lower than the 35 percent rate the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers.  The idea behind the tariffs is to raise the costs of cheap imports, particularly from Asia, and level the playing field for those who manufacture the parts domestically.

"This is not a goodbye for renewable energy in the U.S.," Fatih Birol, executive director of the International Energy Agency, said at the World Economic Forum in Davos, Switzerland.  "I don't believe [that] this decision will reverse the solar expansion in the U.S.  The global solar industry will adjust.  The penetration of solar in the U.S. will continue."

First Solar is the largest of a handful of panel[-]makers left in the U.S. after most of the industry migrated to China in the past decade.  That means [that] the major impact of the duties will be on panel[-]installers, which get most of their supplies from Chinese companies.

More than half of U.S. solar imports come from China (8%), Vietnam (9%), and Malaysia (36%).  Those who oppose the tariffs don't dispute that subsidized imports are hurting U.S. solar manufacturers, but it harms the goal of vastly expanding renewable sources of energy.  In short, we should go green even if it means the loss of tens of thousands of jobs.

The folly of that thinking is that Chinese dumping has already largely destroyed the solar industry in America.  Tariffs will help level the playing field for the survivors and will probably spur the creation of new solar ventures.

China is by far the largest manufacturer in the world of solar equipment.  Why not, when the government heavily subsidizes the companies making it?  The question is, should U.S. or any other solar manufacturers in the world be forced to compete with companies located in China or owned by the Chinese government that can afford to sell the equipment below cost because of the massive loans given them by Chinese banks?

In a word, it's unfair.  And the tariffs, which may hurt some American companies in the short term, will present opportunities for other companies to get in the solar game. 

Creative destruction, anyone?