Can Trump Crush Solar?


In my experience, policymakers vehemently argue over the so-called “correct” course of action on any particular issue. After hearing a carefully crafted policy position, one may think, “this person knows what they are talking about”.  Based on the confidence of such orations, one may even think these positions are based on incontrovertible facts.  Well, I hate to burst your bubble, but it is simply not true. Having the opportunity to both study and work in politics, I have learned one important fact: policies are, at best, hypotheses!  

We live in a complex society where events in Russia and China affect markets in India and the US. On top of that, there are droughts, floods, hurricanes, wars, and a myriad of factors that affect countries and the communities within them. Unfortunately, many politicians herald the virtue of their own plans and downright demonize the plans of their opponent. Furthermore, even after the policy is put into place, it is nearly impossible to determine if its success or failure was due to the policy, or external influences.  This is why when one political party’s policy seems to have success, the opponents will simply claim the success was a rollover of the previous party’s policy.  Ughhh.

So how does all this relate to the pending ITC Trade Case before President Trump?

The Suniva ITC Trade Case

First, a bit of background. Earlier this year, both Suniva and SolarWorld, two of the biggest photovoltaic solar panel manufacturers in the US, filed for bankruptcy and insolvency, respectively. Following their demise, they filed an injunction with the U.S. International Trade Commission (ITC). The basis of the trade case was that foreign solar manufacturers flooded the US market with cheap solar panels and drove them out of business. They claim that trade tariffs should have been and should be in place on solar imports, hence leveling the playing field.

The solar industry at large has directed an avalanche of condemnation toward the Suniva’s ITC filing. The solar industry basically said that if such tariffs are imposed, it will cause a collapse in the industry and the loss of tens of thousands of jobs. The reasoning for this doomsday prediction is that solar tariffs will cause solar installation prices to go up, making solar unattractive to the end user. Hence, fewer installations causing an industry downturn and even potential collapse.

On October 31st of this year, the ITC made its official recommendations on Section 201 – the Solar Trade Case.  For a full breakdown of this recommendation, please CLICK HERE to read an article by Greentech Media (a leader in solar research and media). In summary, the recommendation was a compromise between the very high tariffs proposed by Suniva and pretty much no tariffs as lobbied by the solar industry.

Perhaps the most important consideration of this case is jobs. The majority of solar jobs in America are not in manufacturing; in fact, they only make up a small percentage. According to PV Magazine’s 2017 projection, of the nearly 300,000 current solar jobs in the US, only 13% comes from manufacturing.  So in essence, whether or not solar panels are coming from the US, it does not affect 87% of the industry. See chart below:

From that point of view, it beckons a responsibility towards solar jobs in the installation, sales, and other non-manufacturing sectors, rather than just focus on manufacturing. However, before we jump to conclusions, let us continue.

Remember where I said there is a myriad of factors that affect any singular policy? The same is true for the solar industry.  Rising electricity prices, aging grid infrastructures, and a growing call for cleaner, more sustainable power systems are just a few factors influencing the solar industry.  Nothing happens in a vacuum, and the relative action of any one factor has a rippling effect on the others.

The Trump Effect

So, Can Trump Crush Solar?  That is really what you want to know, right? Here is my heartfelt and hopefully well-articulated answer: NO.

For all those people who either love or hate the man, both are giving him way too much credit. The reason some people are saying that Trump will crush the solar industry is that procedurally, Trump will review the ITC recommendation and, essentially, do whatever the hell he wants.  Sorry to say it so coarsely, but this is the system of the ITC – they make a recommendation to the President and he or she decides what to do.  So, it is actually possible that Trump will impose the harshest trade tariffs in US history. We all know that Trump is a vocal supporter of US jobs and, in his summation, he may feel that high tariffs will ensure US solar manufacturing jobs. He may also believe the industry is stable enough to endure price increases.

Alternatively, Mr. Trump could tote ITC lines and enact the ITC recommendations, or he could swing the other way and go with the status-quo – no new trade tariffs. All of the above and everything in-between is possible.

So, if President Trump aligns with the ITC recommendation or worse, wouldn’t that crush the solar industry? For that question, I refer back to the main point of this article – I do not have a crystal ball, and neither does anyone else. Firstly, for all I know, supposedly high tariffs may not have the adverse ripple effects everyone is saying.  In 2012, there was a similar situation where SolarWorld (a solar manufacturer in the US), asked for tariffs to be placed on Chinese solar panels. This was called the “Anti-Dumping” measure and was meant to remove cheap Chinese panels from the market with high tariffs, and impose reasonable tariffs on “the good stuff” (the tier-one Chinese panels).  Essentially, the hope was that Anti Dumping tariffs would help level the solar playing field.  Those tariffs were enacted, some as high as 239% – YIKES!  

Some predicted that these Anti-Dumping Tariffs would cripple the Chinese solar imports and that increased panel prices would adversely affect the US solar market. So is that what happened? Nope, wrong again. In fact, the solar market flourished after these tariffs. I will, however, make two points on this Chinese tariff; 1) It did help eradicate a lot of the poor quality Chinese products from the market, and 2) There were many loopholes in the “Anti-Dumping” tariff, and many argue that the proposed ITC Trade Case is meant to close those loopholes.

What if I told you that the US solar industry is littered with subpar products and unqualified installers (please note: just because you have an electrician’s license doesn’t mean you should be touching solar panels)? Survival of the fittest states that the strong will survive and the weak will perish.  Let me ask you something, what cell phone is in your pocket? Is it an iPhone, Samsung or perhaps a Google Pixel? If I asked you that question five years ago, it might have been a slew of different brands. So where are Nokia, Blackberry, HTC, LG and Microsoft cell phones today? Fact: Quality matters. I’d be happy to see cheap solar products with unreliable warranties off the market. Currently, any yahoo can import an aluminum frame with something that looks like silicon wafers and calls it a solar panel. Solar is a fairly new industry, and for those of us in the industry, we commonly refer to it as the “Wild West of Solar.” So if regulations or other means are not going to keep the junk off US soil, perhaps a properly designed tariff will help.

To be honest, I think there are a lot of really great solar companies and workers in the US. I have been in the industry for nearly 10 years, and I do not want to see them or the industry suffer.  I have expressed these juxtaposed viewpoints to illustrate a core belief that no matter what President Donald J. Trump decides, the industry will land on its feet.

Do I have a Recommendation?

Here is my hope: that if new a tariff will happen, which does seem likely – that it is nuanced. I don’t mind blanket tariffs regarding solar cells and solar panels as long as there are exceptions. To me, it does not make sense to punish great companies like LG, Panasonic, Hanwa, Hyundai or SunPower for the faults of companies I’d rather not mention. All the companies I have mentioned have solar panel pricing similar or higher than the Trade Case petitioners, Suniva and SolarWorld. If Suniva and Solar World cannot compete for head to head with LG or SunPower, then like in the cell phone industry, they don’t deserve to be there. So perhaps a reasonable policy would include carefully tailored tariffs, targeting the junk with exceptions for the crème de la crème. Otherwise, it would be like iPhone suing imitation iPhone manufacturers, and somehow Samsung and Google got punished – that’s not really the American way.

Let’s face it, our President is a businessman, and this is a business issue. To some, that may not offer any comfort at all, but for me, I offer up a prayer that our President will make the right decision for America.



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