The U.S. solar industry could be on the verge of an industry-transforming decision from the U.S. International Trade Commission and the U.S. Department of Commerce. It's the next chapter in the SolarWorld-inspired Chinese solar panel trade case and anti-dumping claim.
While the U.S. solar industry and its industry organizations could be looking for solutions and negotiated settlements, the self-appointed generals of this important battle are instead electing to auto-micturate. I guess the solar industry gets the leaders it deserves. And today's solar voices are Jigar Shah of CASE and Frank Asbeck of SolarWorld.
Last month, SolarWorld announced that it has filed new anti-dumping and anti-subsidy cases against China and Taiwan with the U.S. International Trade Commission and the U.S. Department of Commerce. The new filing looks to close a loophole in a ruling issued in late 2012 allowing Chinese solar module firms to evade up to a 31 percent tariff by using solar cells manufactured outside of China.
Asbeck and Shah each recently issued the following screeds.
Open letter from SolarWorld chairman and CEO to President Barack Obama
Dear President Obama,
In your most recent State of the Union address, it was gratifying to hear you single out the U.S. solar industry as a global success. We support your passion for the spread of clean energy and the benefits it can bring to the West’s economy, energy security and environment.
I have profound faith in U.S. solar technology manufacturing. The company I founded and lead, SolarWorld, has invested more than $600 million of its own money in building factories on U.S. soil. Many other U.S. companies share this vision for solar manufacturing in the United States.
Today, however, that vision stands in grave danger. I must tell you respectfully, President Obama, that illegal trade practices threaten to destroy any ongoing U.S. role in global solar-industry competition. China is improperly seizing control of an industry that the United States invented, pioneered and grew.
Beginning a few years ago, the Chinese government saw an opportunity not to join but to exploit and dominate this growing industry, as it has done with many other industries. Through state planning, billions of dollars of government subsidies and below-cost pricing, China built massive solar production capacity -- enough to supply the world twice over -- and drove down pricing to unsustainable levels. It harvested U.S. taxpayer-funded incentives, while keeping foreign competitors out of its own market.
This drive has hurt and bankrupted dozens of well-run U.S. solar manufacturers and cost the jobs of thousands of U.S. employees. In late January, Sharp Solar became the latest to announce it would exit the U.S. solar manufacturing industry.
China’s illegal practices have hurt solar investment, research and development and, throughout the solar industry’s supply chain, curtailed the innovation and bright futures of many businesses, their workers and numerous communities. SolarWorld alone has purchased nearly $1 billion in goods and services from other U.S. producers, contractors and service providers over the past three years. Our plant in Hillsboro, Ore. has employed as many as 1,100 American workers.
U.S. solar manufacturing should be thriving. American entrepreneurs and inventors pioneered solar technology and mass manufacturing, and U.S. producers remain technologically advanced. The National Renewable Energy Laboratory has found that China possesses no inherent cost advantage. Yet China is destroying foreign manufacturing competition.
International law prohibits China’s predatory trade actions. For this reason, SolarWorld, with support from industry coalitions in the United States and Europe, filed and won legal cases on both continents. The law is on our side, and the U.S. coalition backing our cause, the Coalition for American Solar Manufacturing, includes 250 employers of American workers (www.americansolarmanufacturing.org).
In the EU market, we reached a settlement with Chinese producers that may help reinstate fair competition, and we see favorable results there for all producers. However, a loophole in the trade remedy in our U.S. cases enabled China to circumvent import duties. To right this wrong, SolarWorld has filed new cases, and I hope U.S. agencies will fairly adjudicate them.
We once again face determined opposition: the government of China, its state-subsidized producers, and Wall-Street-financed corporations that have predicated their growth on illegally subsidized and dumped solar products.
Everyone in the industry wants to see solar deployed on U.S. rooftops and warehouses nationwide as quickly as possible. But some in the United States want only the cheapest solar panels they can find, without regard for issues of fairness – or product quality. It will surprise no one that the group supporting this cause, the Coalition for Affordable Solar Energy, is a public-relations construct largely funded by the Chinese producers. The policy they pursue may make money for a few Wall Street investors over the short term, but it will never prove to be a path to a strong, sustainable solar future.
Meanwhile, SolarWorld remains open to any prospective resolution that promises to hold China accountable to trade agreements and laws that enable fair trade.
We ask for your support and commitment in the name of the entire U.S. solar industry, including both installers -- the broad foundation of which supports our cause -- but also of the U.S. factory workers, engineers and companies that delivered solar to this exciting point of mainstream world adoption. Without both, the security, sustainability and independence that should accompany manufacturing and installing solar technology within the sunny markets where it is sold will remain unrealized.
Please help us ensure that the structures and forces of competition, fairness and law can do their work to re-open a brighter U.S. solar-industry future.
CASE President Jigar Shah’s response to SolarWorld's letter to President Obama
The chairman of German solar manufacturer SolarWorld, Frank Asbeck, penned a bizarre and frankly reckless letter to President Barack Obama this week, warning that the U.S. solar industry is in danger because of international trade. CASE agrees that the industry is under threat, but it’s entirely at the hands of Mr. Asbeck and his Germany-based company.
In his State of the Union address last week, President Obama championed American solar jobs "which can’t be outsourced" because they are installation jobs which take place on America’s rooftops. U.S. solar jobs grew at six times the national employment rate in 2013 because global solar manufacturing, like the manufacture of so many of our consumer electronic goods, has made solar power affordable and attractive to American middle class homeowners. The solar industry contributed nearly 20,000 new jobs to the American workforce in 2013; of these, only 100 were in manufacturing.
As with the last effort from SolarWorld in 2012, there is no credible case that tariffs will lead to increased U.S. solar panel manufacturing or employment. It’s critical to job growth in our country that we recognize where U.S. solar jobs are coming from, and what drives their growth. SolarWorld’s reckless trade petition would destroy the demand for affordable solar which is creating tens of thousands of jobs per year. It is irresponsible and frankly contrary to American interests for a German company to suggest otherwise in a letter to the President of the United States.
Shayle Kann, GTM VP of Research, sees the current case as one where "China has much more impetus to negotiate" and potentially end up with a settled solution. That's what happened in the EU when SolarWorld spearheaded a trade claim there: the EU agreed to a price floor and a volume cap. The price floor, according to sources, was 0.56 euro cents per watt for the first 7 gigawatts of imported modules. Beyond that quantity, it was speculated, EC tariffs would apply. Kann suggests that in the event of a negotiated solution, the Obama administration could play a role. As could Ron Wyden, the chairman of the Senate energy and natural resources committee, representing Oregon, the home state of SolarWorld.
When asked about a negotiated solution, a representative of SolarWorld cited an SEIA proposal but said, "As far I know, that hasn't gone anywhere. Many ideas have been thrown around, but there has been no solution -- so the government of China is still active in our marketplace, and that's not the way it's supposed to be."
The SEIA proposal asks that tariffs be revoked on imports from China, as well as duties on imports from the U.S. for at least five years. SEIA wants Chinese manufacturers to pay into a fund to support U.S. manufacturers and to help grow the U.S. solar manufacturing base.
Rhone Resch, president and CEO of SEIA, just released this statement:
"Without a negotiated settlement, we’re facing a double whammy this year: significant job losses across the entire U.S. solar supply chain and higher prices to American consumers. If imposed, the tariffs sought by SolarWorld -- in excess of 165 percent on China and 75 percent on Taiwan -- could result in a sharp increase in the cost of solar energy in the United States. It’s time to end this needless saber-rattling. There are common sense ways to address SolarWorld’s competitiveness concerns while ensuring the continued growth of the U.S. solar market -- and one good way to do that is through a settlement proposal offered by SEIA. As an organization, we remain committed to developing a win-win solution, which would resolve SolarWorld’s latest complaint, in addition to the broader U.S.-China trade conflict. It’s time to negotiate a settlement -- not litigate one. As a nation, too much is at stake for us to fail.”
SolarWorld Americas did not disclose 2013 production figures, but claimed a module capacity of 350 megawatts and a cell capacity of 500 megawatts. The U.S. is now the No. 3 solar market behind Japan and China, connecting 4.3 gigawatts of photovoltaics in 2013 in a global market of 33 gigawatts, according to GTM Research.
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GTM Research is closely monitoring this trade case and potential solar market impacts for clients and the press. If you have questions, contact Shayle Kann, Vice President of Research, at [email protected].