‘On 25 May 2017, the United States notified the WTO’s Committee on Safeguards that it initiated on 17 May 2017 a safeguard investigation on crystalline silicon photovoltaic cells.’ The official filing can be found here.

There’s a good chance any solar panels imported to the United States after these date will have a tariff added, if the USA – on or before September 22nd – decides solar panel imports have harmed domestic solar panel makers.

The US International Trade Comission will rule whether solar panel manufacturers Suniva and SolarWorld have suffered ‘serious injury’ as a result of global competition. US consumers already pay increased prices for any solar cells or modules from China. Suniva has requested that President Trump impose a four-year minimum import price on PV modules and cells – starting in year one at US$0.78 per watt for modules and $0.40 for cells.

Strategically speaking, if there is a small argument in your mind – buy your solar panels right now. While the Reuters article that first notified me of it says the tariff is possible, my gut says it is probable.

Technically speaking, any solar panels already imported into the United States before the filing date – Friday, May 17th/25th – will not be liable for any future taxation. Any panels imported hereafter, if the US agrees that serious injury has occurred, will be retroactively taxed. The purpose of the safeguard is to protect the country’s solar panel manufacturers against a potential increase in imports of solar panels before the USA decides on September 22nd.

The panels already in the USA will be sold quickly to large-scale project developers that need to meet aggressive pricing for their aggressive investor goals. The price increase’s effective price per watt will vary by project size – 40% cost increase for large-scale utility projects, 30% for commercial projects, and 20% for homeowners. This pricing for solar panels was last seen in the United States in 2011-2013, the project prices will be pushed back to 2015 pricing.

The subsection titled ‘Unforeseen Developments’ might have an affect on the future ruling as it is focusing first on the very general, ‘recent increase in imports and the impact on the domestic industry’ – but more importantly, ‘foreign producers, in response to the various antidumping and countervailing duty orders that were imposed on imports from China and Chinese Taipei, have opened new production facilities in third countries.’ The antidumping/countervailing duty orders is a reference to current taxes on Chinese and Taiwanese solar cells and panels – mostly as a result of special financial terms from the government.

If the future ruling is focused more so on Chinese originated production, then groups like vertically integrated Hanwha from South Korea might gain advantage. Tesla will benefit with its Buffalo Gigafactory importing solar cells. While the cells will have a a minimum tariff of $.40/W, the Gigafactory will be able to make the panels at a price lower than $.78/W. Elon Musk suggested $.50/W several years ago.

One major outstanding variable still to be considered – SQN Capital Management says Suniva Inc. owes it more than $51 million for the purchase of factory equipment it financed. SQN said it’s bankrolling the U.S. trade complaint by Suniva in a bid to help that company recover – seriously. This case is a result of industrial blackmail against a global industry.

The document filed at the WTO specifically lays out the technology to be scrutinized:

The products covered by this investigation are crystalline silicon photovoltaic (CSPV) cells, whether or not partially or fully assembled into other products, including, but not limited to, modules, laminates, panels, and building-integrated materials. The investigation covers CSPV cells of a thickness equal or greater than 20 micrometers, having a p/n junction (or variant thereof) formed by any means, whether or not the cell has undergone other processing, including, but not limited to cleaning, etching, coating, and/or addition of materials (including, but not limited to, metallization and conductor patterns) to collect and forward the electricity that is generated by the cell. Included in the scope of the investigation are photovoltaic cells that contain crystalline silicon in addition to other photovoltaic materials. This includes, but is not limited to, passivated emitter rear contact (PERC) cells, heterojunction with intrinsic thin-layer (HIIT) cells, and other so-called “hybrid” cells.

PERC cells, heterojunction and other hybrid type cells are the most efficient leading edge technologies of the solar industry.

It also offers a carve out:

Excluded from the investigation are CSPV cells, whether or not partially or fully assembled into other products, if the CSPV cells were manufactured in the United States. Also excluded from the investigation are thin film photovoltaic products produced from amorphous silicon (a-Si), cadmium telluride (CdTe), or copper indium gallium selenide (CIGS).

FirstSolar stock could get a bump due to this.

Image Top of solar panel installation at Nellis Air Force Base

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