A Moment of Reckoning for a Soaring Solar Industry

from TIME Magazine,

It was a feat of American ingenuity that created the world’s first operational solar panel in the mid–20th century at Bell Laboratories in New Jersey. The U.S. maintained its pace-setting role in the development of solar technology in the half-century that followed, driving down its cost and helping turn it into a growing source of power for utilities and consumers around the world. As the market has matured, however, global competition has nudged the pioneer from its perch. Today solar-panel manufacturing has expanded to a more than $40 billion industry worldwide, more than half of which is controlled by China. With massive government investment, China has developed an unparalleled ability to build solar panels cheaply, allowing its companies to pass on the relative savings to the consumers and energy companies that buy them. As a result, China’s solar-panel industry has grown an average of 18% annually in the past five years, compared with just 0.4% growth in the U.S., according to data from market-research firm IBISWorld.

Now two struggling American solar manufacturers have launched what they’re casting as a last-ditch effort to save the industry’s small U.S. footprint. The solution: a tariff on Chinese solar-panel imports. The appeal for them is clear. The proposed tariff would effectively double the price of Chinese panels, making U.S. panels competitive again in the domestic market. “Without temporary relief, there will likely be no existing American [solar] cells or modules industry within a short period of time,” wrote Suniva, a solar-panel manufacturer, in a federal complaint. “Relief is necessary to prevent the permanent loss of a competitive domestic industry.” But the companies that operate panels and sell the electricity say a tariff would rattle their industry. Electricity generation from solar power has grown exponentially in the past decade. If the cost of panels suddenly soared, many industry analysts warn, the development of new projects would grind to a halt.

A decision on the issue from the International Trade Commission in Washington, D.C., is expected this month. If the group determines that Chinese solar imports threaten to destroy the U.S. solar manufacturing industry, President Trump will have license to propose a remedy. There are signs that Trump will be sympathetic to aiding the nation’s solar-panel makers. He has expressed skepticism about free-trade deals, decried the U.S. trade deficit with China and reportedly asked advisers to develop plans for a tariff to boost U.S. manufacturing. Together, this posture has left the renewable-energy industry unsettled. Solar and wind advocates have long believed the market will keep America’s solar industry afloat. But even the market may be no match for a tariff.

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