The U.S. Solar Industry Will Survive This Setback
Back in August we issued a statement regarding our strong opposition to the impending tariff on solar panel imports. As you have likely heard by now, President Trump imposed a 30 percent tax on solar panels this week. All of us in the renewable energy industry are unhappy, of course. But that does not mean we won’t fight back. And we’re very hopeful that most U.S. solar projects will survive.
What does this mean?
With the new tariff in place, there will be an average increased charge of 10-15 cents per watt on solar imports. But, the good news is that with every passing year the tariff rate is scheduled to decrease by five percentage points and with panel costs continuing to decline, the actual tariff impact will decrease even faster. After four years, it’s scheduled to disappear altogether.
We’re not saying that putting a hefty tax on solar panel imports isn’t a clear problem for business. Procuring solar panels will cost more, which, in turn, will slow the construction of solar energy projects. Not only will this slow a growing, prosperous industry, it will take jobs away from thousands of Americans. The SEIA estimated that this tariff will cause 23,000 job losses just this year, and will increase by the tens of thousands within the four year tariff period.
However, we’re confident that most solar projects will certainly survive this setback. Community solar projects, which benefit from a combination of low construction costs and high revenues, may even become more attractive to solar developers during this time.
How will it affect Arcadia Power?
We strongly oppose this ruling. But if we work together to continue to support U.S.-based solar projects, the industry will make it through this and will continue to thrive. You will still be able to subscribe to community solar projects from Arcadia Power and current projects will not be impacted by this tariff.
Below are some words from our Director of Community Solar on where Arcadia Power stands on the solar tariff.
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Arcadia Power Comments to the ITC
August 11, 2017
The Honorable Lisa R. Barton
U.S. International Trade Commission
500 E Street SW
Washington, DC 20436
Dear Secretary Barton,
Thank you for the opportunity to comment on this Petition for Global Safeguard Relief Pursuant to Sections 201-202 of the Trade Act of 1974 – Crystalline Silicon Photovoltaic Cells and Modules (the “Petition”).
Arcadia Power is providing this comment to voice our strong opposition to the Petition brought forward by Suniva, Inc. (“Suniva”) and SolarWorld Americas Inc. (“SolarWorld”) (collectively, the “Petitioners”) to the International Trade Commission (the “Commission”).
Arcadia Power is a renewable energy software and technology company headquartered in Washington, DC, with 36 full-time employees, serving more than 30,000 customers nationwide. A strong and growing domestic U.S. solar industry is vital to our business, our employees, and our customers. Arcadia Power’s proprietary software powers the first nationwide community solar program, known as the Portable Panel®, which permits customers in all 50 states to remotely subscribe to and benefit from the production of domestic U.S. solar electricity. In recognition of this innovation, made possible by America’s strong, domestic solar industry,
Arcadia Power’s Portable Panel® product was named a finalist for Fast Company’s World Changing Ideas of 2017 award. The Portable Panel® relies on a thriving domestic solar industry, comprised primarily of small- to mid-sized companies involved in manufacturing, engineering, construction, and other services that create jobs and economic opportunity across the domestic solar industry.
The Section 201 trade law is an important component of U.S. trade law, but these Petitioners do not merit the trade protections provided under this provision. The petitioners’ proposed tariffs and price floors would cause severe harm to the United States solar industry by causing job losses across the United States, particularly among small and medium-sized manufacturers.
Suniva, a company that has declared bankruptcy and is owned by Shunfeng International, headquartered in China, and SolarWorld, a company whose German parent company SolarWorld AG has filed for bankruptcy, are makers of solar cells and modules that are struggling to stay afloat. These two companies are seeking government protection through filing the Petition. If Suniva and SolarWorld can claim Section 201 protections to keep their struggling companies afloat, then the bar for future trade cases would be dangerously low for any American manufacturers in similar circumstances.
As significant, the proposed remedies will significantly harm American manufacturers of solar parts and panels. The Petition seeks a tariff of 40 cents per watt on all foreign-made solar cells, with a floor price of 78 cents per watt on all panels made with foreign inputs. According to Wall Street analysts, the proposed remedies would double the price of solar panels in the U.S. The cost of starting a project in the U.S. would rise dramatically, slashing demand for solar projects and harming solar energy’s position in the U.S. electricity market.
Both the size and scope of these tariffs will affect U.S. solar manufacturers. The U.S. solar industry employs roughly 260,000 workers, more than 38,000 of whom manufacture a wide range of solar components, such as racking systems and inverters. In contrast, Suniva employed only 260 workers when it declared bankruptcy. This trade petition threatens to cut off the cells and modules that form the basic ingredients for the entire solar supply chain ecosystem, placing those 260,000 U.S. jobs at risk.
Solar energy is one of the most promising sectors in the American economy, providing good jobs and valuable products at low cost to consumers. The industry is valued at $23 billion and was the top source of new U.S. electricity generation in 2016. Last year, the solar industry created 51,000 jobs, approximately one in every 50 new jobs created in the United States. Imposing tariffs on such a rapidly growing industry that can compete both domestically and globally would constrain America’s technological and economic prowess.
We hope the ITC will take these facts into account and end this Section 201 investigation. Should you have any questions, please do not hesitate to contact Joel Gamoran, Director of Community Solar, Arcadia Power.
Director of Community Solar, Arcadia Power