Suniva Dispute Could Devastate US Solar Industry, Cutting Two-Thirds Of Expected Installations Through 2022
If the US Government and its International Trade Commission rules in favor of a recent trade dispute filed by Chinese-backed US solar PV manufacturer Suniva, then the country’s solar industry would be immediately devastated, and could see two-thirds of expected installations over the next five years erased.
This is the new and terrifying conclusion made by GTM Research in a new GTM Research Spotlight article published this morning. GTM Research ran the numbers based on the requests made by Suniva that the US International Trade Commission (ITC) introduce a tariff and price floor on solar equipment — specifically, a $0.40/watt tariff for cells and a floor price of $0.78/watt on modules. If these penalties are brought to bear on the US solar industry, up to two-thirds of solar installations expected over the next five years would be put in immediate jeopardy.
The ITC formally accepted the petition in May and began an ‘Antidumping and Countervailing Duty Investigation’ that it expects to conclude in September. According to a Fact Sheet compiled by the ITC (PDF), “The Commission may recommend to the President an increase in a duty, imposition of a quota, imposition of a tariff-rate quota (e.g., a two-level tariff, under which goods enter at a higher duty after the quota is filled), trade adjustment assistance, or any combination of such actions.”
Given the current US President’s preference for reducing America’s dependency on imports and international trade deals — in favor of theoretically increasing US manufacturing jobs — the most worrying part of the ITC’s comments was the fact “the Commission may also recommend that the President initiate international negotiations to address the underlying cause of the increase in imports or that he implement any other action authorized under the law that is likely to facilitate positive adjustment to import competition.” President Trump has made a platform of being pro-American business and anti-anyone else’s business, so it is concerning that the realities of this case may fly unnoticed in the face of the possibility of hampering international businesses.
GTM Research note that more than 20 gigawatts (GW) of utility-scale solar is already at risk of being cancelled if module prices fall back to 2012 levels. However, if the ITC and President Trump approve Suniva’s proposal, the new minimum price on imported crystalline silicon solar modules and new tariff on imported cells would lead to the United States missing out on 47 GW of new solar installations over the next five years.
Earlier this year, GTM Research in tandem with the US Solar Energy Industries Association published its 2016 review report, in which it concluded that the United States had installed nearly 15 GW of new solar capacity in 2016, breaking its own record by nearly doubling the previous year’s capacity installations. Looking forward, while 2017 and 2018 will likely see year-over-year declines, things will start to begin looking back up in 2019, and by 2022 annual installations will exceed 18 GW.
However, the latest report from GTM focusing on the impact of Suniva’s trade dispute found that total US solar installations would fall from 72.5 GW between 2018 and 2022, to just under 36.4 GW under a $0.78/watt floor price on modules. If the $0.40/watt tariff for cells is included, the $1.18 per watt minimum price would decimate the industry, leading to only 25 GW of solar installations over the five year period — barely topping out 2016’s yearly figure.
This is not the first warning rung by industry experts over the Suniva trade dispute. Earlier this month, the Solar Energy Industries Association (SEIA) signaled that it believes a favorable ruling for Suniva would lead to the US solar industry losing an estimated 88,000 jobs across the country — or about a third of its current workforce. As that pertains to specific large state markets, California would lose 16,000 jobs, South Carolina would lose 7,000 jobs, and the Texas solar industry would crash in half, losing 46% of its solar jobs.
The new GTM Research analysis points out that the majority of utility-scale solar PV procurement currently relies on solar being cost competitive with natural gas alternatives, and currently three-quarters of the utility-scale solar PV pipeline was procured outside of renewable portfolio standards. Under both tariff scenarios outlined above, the large-scale utility solar pipeline could be utterly decimated if PPA prices are renegotiated, and could subsequently wipe out several state markets altogether under either tariff scenario.
Things look a little better for the non-residential PV segment, and the residential PV segment is likely to be least affected, but I’m not sure whether GTM took into account the loss of jobs across the large markets which they suppose would keep the residential sector ticking along.
In a day and age where information and specifics such as these seem to play very little role in political decisions of this magnitude, I’m not sure whether we can hold out hope for Suniva’s case being dismissed. Only time will tell, it seems.
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