ITC rules foreign solar panels damaging U.S. industry

Workers install solar panels on a home in Katy in June. (David A. Funchess / Houston Chronicle ) Workers install solar panels on a home in Katy in June. (David A. Funchess / Houston Chronicle ) Photo: Houston Chronicle Photo: Houston Chronicle Image 1 of / 1 Caption Close ITC rules foreign solar panels damaging U.S. industry 1 / 1 Back to Gallery

The U.S. International Trade Commission ruled Friday to that a flood of foreign made solar panels was damaging the domestic solar manufacturing industry, setting the foundation for new tariffs that developers here fear will dramatically raise costs on solar projects.

Two U.S. solar manufacturers, Georgia-based Suniva and Oregon-based SolarWorld, filed a petitions with the ITC earlier this year, arguing that large manufacturers abroad are dumping their products onto the global market below cost, driving American competitors into bankruptcy.

The ITC is scheduled to make a decision on what if any tariffs to impose by Nov. 13. A final decision would then be made by President Donald J. Trump, who campaigned on protecting U.S. manufacturing jobs by taking a tougher line on trade policy.

"We brought this action because the U.S. solar manufacturing finds itself at the precipice of extinction," Suniva said in a statement Friday. "President Trump can remedy this injury with relief that ensures U.S. energy dominance."

The Solar Energy Industries Association maintains that the tariff proposed by Suniva would harm job growth in an industry that currently employs an estimated 250,000 people.

"It is disappointing that two uniquely mismanaged and uncompetitive foreign-owned companies have been able to benefit from a process meant to protect U.S. businesses that have truly been harmed by subsidized foreign competition," said John Berger. CEO of the Houston-based solar developer Sunnova. "Tariffs, subsidies, and other market distorting remedies and policies harm both taxpayers and consumers who would benefit from open markets and robust competition."

As we reported last month following a hearing on the tariffs before the ITC:

Last year solar accounted for almost 40 percent of new generation on the U.S. power grid, more than any other source, according to data compiled by GTM Research, a market analysis firm that studies renewable energy. Solar capacity in Texas doubled last year to 1.2 gigawatts, enough to power more than 200,000 Texas homes.

"Whether that growth would continue if Suniva is successful, that is pretty questionable," said George Hershman, general manager of Swinerton Renewable Energy, which is building a 150-megawatt solar farm in West Texas for NRG Energy.

Driving the installation boom are solar prices that have plunged roughly 70 percent since 2010, the product of a global race to produce greater and greater quantities of panels to feed demands from governments worldwide for carbon-free forms of energy.

With countries including the United States pumping tens of billions of dollars into building the solar industry, that has at times resulted in a supply that far exceeds demand, said Tim Fox, vice president at the Washington research firm ClearView Energy Partners.

"It's a mature industry now, and there's winners and losers," he said. "There may be a smaller U.S. manufacturing role than first envisioned, but I don't expect them to be entirely wiped out."

The prospect of an across-the-board tariff has raised protest from a diverse coalition of business and political groups - including everyone from the conservative Heritage Foundation to some of the nation's largest power companies, including Dallas-based Vistra.

"Over the last several years utilities and public power have increasingly diversified their portfolios," said Scott Segal, an attorney representing the Electric Reliability Coordinating Council, a power industry group. "Inappropriate imposition of trade remedies on solar technology can fundamentally change the landscape for renewables without any consequent social benefits."

Likewise, lobbyists representing solar developers lined up seven elected officials from around the country to speak against the tariff at Tuesday's hearing. The lone public official who spoke in support of solar manufacturers was Bucky Johnson, mayor of Norcross, Ga., the town of 16,000 where Suniva's plant operated before shutting down earlier this year.

"Some might say protectionism," he said, "I say bunk. Give us a fair shot at competing."

The ITC is expected to issue a final ruling on a tariff by mid-November. Were it to rule in favor of Suniva, the ultimate decision on a broad solar tariff would lie with President Donald Trump.

The White House has offered little indication how it is leaning, but the president's tough-on-trade rhetoric and support for coal energy, a competitor of solar, have raised speculation he would be inclined to support the tariff.

"We believe the Suniva petition was drafted with President Trump's energy and economic policies in mind," Fox said.