Energy Week Ahead: Solar Industry Split as Tariffs Loom on China
The U.S. Commerce Department tomorrow is set to announce its final punitive duties on imports of Chinese solar-energy products, a move that probably will draw the ire of many American companies in the industry.
The tariffs will increase input costs and lead to higher unemployment, according to U.S. solar developers, installers and some manufacturers including SunEdison LLC of Belmont, California.
“The harm will fall on many U.S. small businesses,” Kevin Lapidus, the company’s senior vice president for legal and government affairs, said at a briefing last week in Washington.
The issue pits two of President Barack Obama’s policy goals -- trade enforcement and support for clean energy -- against each other. The department’s announcement follows an investigation requested by a group of U.S. solar-energy manufacturers and may heighten trade-related tensions between the world’s two biggest economies ahead of the U.S. elections.
The Commerce Department in May announced preliminary duties of 31 percent to 250 percent on certain Chinese-made solar imports, in response to a complaint by manufacturers led by the American unit of Bonn-based SolarWorld AG. (SWV) In March, the agency set separate tariffs as high as 4.73 percent on the goods, to offset Chinese-government subsidies. U.S. imports of Chinese- produced solar products were valued at $3.1 billion in 2011, more than double (107 percent) the previous year, according to the agency.
In June, a Commerce review suggested the tariffs to be announced this week may be higher than those announced earlier. Still, the decision may not be final. In order for the duties to stand, the U.S. International Trade Commission must determine that manufacturers including SolarWorld have been harmed. That ruling is scheduled for early next month.
SolarWorld made its case last week at an ITC hearing in Washington. Gordon Brinser, president of the company’s U.S. business, said China’s support for domestic manufacturers caused a worldwide price collapse for photovoltaic cells and modules.
The company can’t compete “with the Chinese government or with the Chinese producers that fail to play by the rules,” he told the commission.
Companies including SunEdison and the U.S. units of Suntech and Trina Solar Ltd. (TSL), part of the Coalition for Affordable Solar Energy, disagree. They say SolarWorld failed to innovate in a rapidly changing market.
Whatever happens with the solar-energy dispute, trade relations between the U.S. and China probably will remain tense. Commerce is considering similar duties on wind-energy imports from China, in response to a complaint from U.S. companies including Broadwind Energy Inc. (BWEN) of Naperville, Illinois.
The World Trade Organization on Sept. 28 agreed to investigate U.S. anti-subsidy duties on Chinese goods including wind and solar products. China in May alleged in that renewable energy policies in at least five U.S. states violate international trade rules.
“SolarWorld’s actions have triggered a global trade war,” said SunEdison’s Lapidus.
ALSO WORTH WATCHING:
YERGIN’S OUTLOOK: Daniel Yergin, the author of the Pulitzer Prize-winning history of oil, “The Prize,” and last year’s sequel, “The Quest,” discusses the energy outlook today at the Atlantic Council in Washington. Yergin, a shale gas proponent, was a member of a panel advising the Energy Department on the safety of its development. The 5 p.m. event will be streamed live from the council’s website.
WINTER FORECAST: The Energy Department hosts its annual winter outlook conference tomorrow, taking a look at the expected weather pattern and supply and demand projections for heating fuels and other energy sources. The day-long event takes place at the National Press Club in Washington starting at 7:30 a.m.
To contact the reporter on this story: Brian Wingfield in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jon Morgan at email@example.com