Monday, September 25, 2017

In Domestic Solar Manufacturing Decision, ITC Rules in Favor of Suniva, SolarWorld


Following its Chapter 11 bankruptcy filing in April, US-based solar cell and panel manufacturer Suniva petitioned the U.S. International Trade Commission (ITC) that low-cost solar cells and panelsare causing "serious injury" to US manufacturers under the 1974 Trade Act. Under Section 201 of the 1974 Trade Act, the President can implement tariffs or quotas on imported goods from anywhere around the world if it is proven that the imports cause "serious injury" to a domestic industry. SolarWorld AG, a bankrupt solar panel manufacturer from Germany with US operations, joined Suniva in its argument. On Friday, the ITC unanimously accepted Suniva and SolarWorld's argument, ruling that cheap foreign imports are in fact causing "serious injury" to U.S. solar cell and panel manufacturers. Following a remedies hearing in a few weeks, the ITC will formally deliver its recommendations to the President by November 13 and the President will have until January 12 to decide whether to impose tariffs and import quotas on solar cells and panels from abroad.  

A decision by the President in favor of imposing tariffs and import quotas could jeopardize the ability of developers to finance solar projects in the United States due to substantial increases in the cost of cells and panels and the small size of the domestic manufacturing market. Lenders and developers are dealing with the potential fallout of tariffs and import quotas in different ways -- whether it be halting construction and "hoarding supplies" or writing provisions into financing documents to shift the risk of potential price spikes.

More information regarding the implications of the ITC's decision and possible outcomes of the President's actions can be found here and here.