On Tuesday, more than 40 witnesses spoke in front of trade commissioners in Washington, offering up their thoughts about a controversial petition submitted by Suniva and SolarWorld.
The two financially troubled solar manufacturers are lobbying for harsh penalties on imported solar panels. Most others in the U.S. solar industry want commissioners to quash the case, fearing the downstream consequences.
The commission is expected to complete its investigation of the Section 201 petition by September 22. In the meantime, we’ve compiled some noteworthy quotes to give readers a sense of how the day played out.
To set scene, let’s begin with Suniva and SolarWorld’s rationale for why the U.S. needs solar import tariffs and price minimums.
Suniva’s attorney, Matthew McConkey:
“If there’s ever been a 201 case where a finding of serious injury is warranted, it’s this one,” said McConkey in his opening remarks. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities.”
“The data set forth in the commission’s staff report reveals a domestic industry that is literally on the precipice of being extinguished. U.S. module manufacturers suffered net losses exceeding a billion dollars over a five-year period,” said McConkey. “If this isn’t serious injury, then that concept has no meaning.”
“Even as U.S. demand for solar products increased from 2012 to 2016, foreign suppliers -- including those in China, Korea, Canada and Malaysia -- began capturing an even larger share of the U.S. market. But then we saw module prices drop by a third in the second half of 2016, during a year when all imports increased by 50 percent from the previous year.”
SolarWorld’s attorney, Tim Brightbill:
“As the commission is well aware, the domestic industry in this case has been largely wiped out by the global import surge,” said Brightbill.
“There is massive global overcapacity among many producers. In addition…foreign producers have production operations in multiple countries and are able to shift that production and those exports, rapidly, from country to country.”
Juergen Stein, CEO of SolarWorld:
“The domestic solar manufacturing industry has been driven to the brink. Relief under Section 201 is our last hope,” said Stein. “Unless we act promptly and decisively, the United States may find itself with no solar manufacturing sector left at all.”
“Solar cell and module prices fell in 2016, even as the price of polysilicon -- the most valuable raw material within a cell -- was rising. This is an unsustainable situation, and what I would call ‘the circle of death.’”
“We had to let go many workers who had been with the company for many years. These job losses should not be happening in an industry where demand is so strong and good profit margins are a given in the overall value chain.”
Dozens of solar industry experts and executives attempted to debunk the petitioners’ claims. Multiple witnesses portrayed Suniva and SolarWorld as subpar companies that had failed to adapt to the fast-paced solar industry.
Matthew Nicely, attorney for the Solar Energy Industries Association and SunPower:
“Have some companies failed? Yes. But that’s the core nature of a high-tech industry. You must innovate to keep up and deliver quality, reliable products at scale. The petitioners have failed badly, and their failure has nothing to do with imports.”
“That the two petitioners would even bring this case demonstrates their poor business judgment and their hubris. They seek a public remedy for their own private failing. If successful, they will undermine the hard work and innovation that is making solar a viable alternative to conventional energy sources.”
Craig Cornelius, senior VP of renewables for NRG Energy:
“Neither of the petitioners in this case had a product that they offered at [our] specifications, and certainly not at the scale or quality we required. In addition to this inability to meet our essential technical requirements, there were other reasons why we, and other purchasers like us, were unable to purchase products from the petitioners during the period of investigation.”
James Lamon, CEO of Depcom:
“Depcom’s experience with SolarWorld was unsatisfactory,” said Lamon. “Depcom had to exert oversight and pressure to get SolarWorld to deliver its product, which was never delivered on time -- a product we believed...was made in America…when in fact, per the label on the modules, was manufactured in Germany and Thailand.”
Thomas Prusa, chair of the economics department at Rutgers University:
“Imports are always dominated by one or more factors. As shown in the residential market, imports are near the bottom of the list of factors, dominated by grid-parity issues and technology-driven cost changes. The utility market is also similar,” said Prusa, referring to the results of an economic study. “In summation, empirical analysis formally rejects the claim that imports are the most important cause for declining prices over the period.”
Other opponents spoke of the damages that tariffs would have on the larger solar industry.
Amy Grace, head of North America research for Bloomberg New Energy Finance:
“Utility-scale solar must be competitive with the operating cost of an efficient natural-gas plant -- roughly $20 to $30 per megawatt-hour -- or it will not be built,” said Grace. “It is now price-competitive with wind and wholesale power in several parts of the country, but just barely.”
“Any increase in the price of solar offered to electricity purchasers…would result in fewer contracts being signed and lower solar deployment.”
Tom Werner, president and CEO of SunPower:
“We have more than 14,000 direct and indirect workers,” said Werner, who described his company as the country’s second-largest solar provider. “These workers would be vulnerable to solar market decline.”
“Tariffs would adversely impact the U.S. economy, burden domestic manufacturers and suppliers, raise prices for customers and eliminate tens of thousands of jobs.”
Matthew Nicely, attorney for the Solar Energy Industries Association and SunPower:
“Solar is an American success story whose future remains bright. Its continued success could be destroyed by the misguided actions of the two petitioners and their small group of supporters.”
The commission also heard testimony from government officials from Minnesota, North Carolina, Georgia, Maryland and Virginia. All spoke against the petition, except for the mayor of Norcross, Georgia, which was home to Suniva’s headquarters and one of its cell plants.
Bucky Johnson, mayor of Norcross, Georgia:
“Suniva became part of the DNA of our city, until there was a turn in the story,” said Johnson, noting nearly 300 jobs were lost in Norcross due to Suniva's bankruptcy.
“I sadly learned there were other communities that experienced the same impact as Norcross,” he continued. “Do all that you can do to give Suniva a fighting chance.”
Jason Saine, North Carolina state representative:
“Imposing tariffs on imported modules is not the way to go. […] The remedy would do more harm than good here.”
Lauren McDonald, member of the Georgia Public Service Commission:
Import duties will “deprive consumers of the benefit of competitively priced solar projects,” said McDonald. “Any tariffs imposed would distort the market, threatening tens of thousands of American jobs.”
“[Suniva and SolarWorld] are here because their products are not economic and their business model is not competitive.”
Representatives for half a dozen countries and the European Union took turns explaining why their nations should be excluded from solar import duties.
Reynaldo Linhares Colares, second secretary for the Embassy of Brazil:
The World Trade Organization’s Agreement on Safeguards “states safeguard measures shall not be applied against a project originating in a developing country member, as long as its share of imports…does not exceed 3 percent,” said Colares.
Brazilian solar exports from 2012 to 2016 “accounted for only 0.01 percent of the total value imported by the USA in the same period,” he continued. “Therefore…imports from Brazil should be excluded.”
Carrie Goodge O’Brien, trade policy counselor for the embassy of Canada:
“The Canadian and U.S. supply chains are integrated and complement one another,” said O’Brien. “The imposition of duties on solar products would risk undermining this important relationship, negatively impacting both Canadian and U.S. industry and consumers.”
“The imports from Canada must be excluded from any safeguard measure if they do not account for a substantial share of total subject import, and they do not, in this case,” she said, referencing a provision of the North American Free Trade Agreement.
While the vast majority of witnesses opposed the tariffs, a handful of solar executives testified in support of Suniva and SolarWorld.
Edward Harner, chief operating officer of Green Solar Technologies:
“Absent much-needed trade relief, these import trends will only worsen,” said Harner. “Without relief, I am concerned that foreign producers will complete their goal of eliminating U.S. competition.”
Steven Shea, former vice president of Beamreach Solar:
Beamreach “could not keep pace with the rapid reduction in market prices driven by imports -- first in China, and then from countries like Taiwan, Vietnam, Malaysia, Korea and others,” said Shea, whose solar manufacturing company employed 100 workers in California before going bankrupt in January.
“Beamreach was a well-established company,” said Shea. “However, this flood of imports, and the resulting price collapse starting in 2016, eroded Beamreach’s competitiveness in a matter of merely months.”
Representatives for Suniva and SolarWorld rejected allegations that they had been responsible for their own financial woes. Suniva filed for bankruptcy in April, while SolarWorld Americas recently secured a $6 million lifeline after its German parent company filed for insolvency.
Suniva’s attorney, Matthew McConkey:
“Arguments have been raised…that Suniva and SolarWorld somehow brought their gargantuan problems on themselves. Not only are these arguments factually false, they’re offensive,” said McConkey.
“The almost 30 members of the domestic industry that have gone out of business in the last five years -- as well as Suniva and SolarWorld -- all of them made bad business decisions or substandard products?” he asked, incredulous. “Please.”
Seth Kaplan, president of International Economic Research:
“The issue is that prices were falling faster than costs, causing serious injury,” said Kaplan. “The idea that the semiconductor industry, at large, is barred from Section 201 relief because technology improves over time is, frankly, nuts.”
SolarWorld’s attorney, Tim Brightbill:
“For part of today, we heard an inaccurate smear campaign [from] SEIA,” said Brightbill. “How do you scale up when you’re under an avalanche of imports?”
The panel of four commissioners, comprising two Republicans and two Democrats, spent hours questioning both sides.
Questions to petitioners:
“What would you recommend might help the broader solar industry?” asked Commissioner Meredith Broadbent.
“Our goal is to put a remedy in place that assists U.S. manufacturing…and continues to encourage solar growth in the United States,” said Brightbill. “We value manufacturing jobs. We value all jobs in the solar industry.”
“We’re not out to kill the industry,” answered Matt Card, Suniva’s VP of commercial operations. “We are very open to a solution that works for all parties.”
“In your fact sheet…you estimate that U.S. solar cells and module manufacturing employment would increase between 37,500 and 45,500 workers. These job increases are substantial,” said Broadbent. “What would occur on the ground that would result in this job growth?”
“The assumptions that go into those job estimates are that there is new investment in cell and module production capacity that would raise U.S. cell capacity to 3 gigawatts per year and module capacity to 3.6 gigawatts per year,” said Warren Payne, an international trade adviser for the law firm Mayer Brown, which conducted the jobs analysis.
“And that could happen in four years?” asked Broadbent.
“Yes,” said Payne. “The industry has the ability to scale up rapidly.”
“What inspired Suniva and then SolarWorld to revive the use of the dormant Section 201 global safeguard law?” asked Vice Chairman David S. Johanson, noting it had not been used in a case since 2001.
“Whack-a-mole,” said McConkey, explaining that companies would keep popping up in new countries to circumvent anti-dumping laws. “We would be chasing this product all around the world.”
Questions to petition opponents:
“What accounts for the substantial number of module assemblers leaving the U.S. industry over the period of investigation?” asked Broadbent.
“There are a variety of reasons,” said Nicely. “There are many instances in a high-tech industry in which companies bet on the wrong technology, and they invest a lot of money in technology that doesn’t work out. To then turn around and blame that on imports is a bit of a stretch.”
“What are we to make of all the domestic plant closings since 2012?” asked Johanson. “What does this tell us about the state of the domestic industry?”
“The predominant reason we saw the failures is, you didn’t have scale with a lot of these companies when they came in. A lot were startups and new ideas,” said Dan Shugar, founder and CEO of California-based NEXTracker. “You didn’t have large companies making big, sustained investments to getting their products fully qualified…so that they would develop a long-term sales model.”
“I heard people were talking about shortages right now. Is that in the U.S. market?” asked Commissioner Irving Williamson.
“Yes. Particularly buyers trying to buy in the spot market right now are seeing significant price escalation and difficulty in supply, from what we’ve heard in the market,” said Ed Fenster, co-founder and executive chairman of Sunrun.
“SolarWorld suggested a variety of countries invested in [crystalline silicon photovoltaic] capacity in response to the anti-dumping and countervailing duty orders on China and Taiwan. Do you agree that this was the reason? Why did they invest in such capacity in countries that do not have a sizable home market demand for solar products?” asked Broadbent.
“We have multiple places where we make modules,” said Tom Werner, president of SunPower. “We have those sites compete and then share best practices, and I think that’s part of what you’re seeing here.”
“We made our decision to invest in Singapore in 2008,” said Steven O’Neil, chief executive officer of REC Solar. “The market there is small, but we set up there because of the access to all global markets…and proximity to raw materials, so we could export around the world.”
For more on the politics surrounding the case, read our earlier coverage.