Solar energy is booming in the United States, but companies riding the wave fear that President Donald Trump could undercut them this week if he decides to impose new tariffs on imported solar panels.
Businesses that install solar-power systems are benefiting from a glut of cheaper panels made overseas, mostly in Asia. That has made solar power more competitive with electricity generated from coal and natural gas.
A green-technology research firm estimates that tariffs could cost up to 88,000 U.S. jobs related to installing solar-power systems.
On the other side are two U.S. subsidiaries of foreign companies that argue the domestic manufacturing of solar cells and modules has been decimated by a flood of imports, mostly from Chinese companies with operations throughout Asia.
Imports of silicon photovoltaic cells, the building blocks of solar panels, soared nearly 500 percent between 2012 and 2016, according to the U.S. International Trade Commission.
The four members of the commission – two Republicans and two Democrats – unanimously ruled in October that imports are hurting American manufacturers, although they differed on exactly how the U.S. should respond. Trump has until Friday to act on the agency’s recommendations for tariffs of up to 35 percent.
Trump has wide leeway – he can reject the recommendations, accept them, or go beyond them and impose tougher tariffs. Congress has no authority to review or veto his action. Countries harmed by his decision could appeal to the World Trade Organization.
The trade case grew out of a complaint by Suniva Inc., a Georgia-based subsidiary of a Chinese company, which declared bankruptcy last April. Suniva was joined by SolarWorld Americas, the U.S. subsidiary of a German company. Suniva wants higher tariffs than those recommended by the trade commission.
The U.S. Commerce Department imposed stiff anti-dumping duties on imported panels made from Chinese solar cells in 2012 and 2015. Tim Brightbill, SolarWorld Americas’ lawyer, said Chinese companies have gotten around those sanctions by assembling panels from cells produced in other Asian countries such as Malaysia and Vietnam. That makes the current trade case even more important, he said.
“It is a global case. It addresses the global import surge,” Brightbill said. “We need the strongest possible remedies from President Trump to maintain solar manufacturing here in the United States.”
A consultant for SolarWorld said tariffs on imports could create up to 45,000 U.S. jobs, assuming that domestic capacity grows, and installation jobs would also increase. But U.S. manufacturing of solar cells employed only about 1,300 people at its recent peak in 2012, according to the trade commission.
The Solar Energy Industries Association, a trade group for U.S. installers, says tariffs would drive up the cost of installing solar-power systems, leading to a drop in demand.