U.S. solar businesses don’t need tariffs
The industry is already thriving, despite the claims of two companies
The U.S. solar Industry is already thriving. The last thing it needs is a new tariff to shield small and failing silicon photovoltaic panel makers from foreign competition.
Globally the world is rapidly going solar. The global price for large-scale solar installations is quickly approaching the magical $1-a-watt figure, down from $2.50 a watt just a couple of years ago. At these prices, non-polluting solar beats competing coal, oil, natural gas and nuclear on price without carbon taxes. We don’t need protective tariffs or more taxes to go solar.
But two companies, Suniva and SolarWorld, have just convinced the U.S. International Trade Commission they were damaged by cheaper foreign imports and have requested a 40 cent tariff
on imported silicon solar cells to make PV panels and a 78 cents-per-watt
minimum price for imported solar panels.
This makes no sense whatsoever in face of current U.S. solar panel manufacturing realities. The price from two leading U.S. solar panel manufacturers is already projected to be between 40 and 50 cents a watt for their panels, or less. Suniva and SolarWorld will never be able to sell panels at 78 cents a watt and never get financing to do so.
First Solar expects that its new Series Six thin film panel not based on silicon will sell at 40 cents a watt or less and be competitive with Chinese silicon panels at 35 to 40 cents a watt. U.S. solar manufacturing leaders like Tesla will sell silicon panels from its new PV gigafactory in Buffalo, N.Y., at a price of 50 cents a watt, to be combined with complete low cost and competitive Solar City installation.
All the Suniva tariff will do is allow First Solar, Tesla and other new gigafactories to charge U.S. customers more than they would in a free market once shielded from foreign competition until more gigafactories come on line. There is no way that Suniva or SolarWorld would ever be able to compete.
The practical effect of the tariff was reflected immediately on Wall Street. The price of First Solar stock immediately rose sharply, since slapping a tariff on foreign-made panels would mean that, for a short while, a U.S. PV market would not have enough panels to meet demand beyond the existing production capacity of Tesla and First Solar, now about 2 gigawatts a year of panels, with more gigawatts to come.
A high tariff will mean, of course, that more solar gigafactories will be built on a crash basis, but not by Suniva or SolarWorld. The Japanese thin film manufacturer Solar Frontier is already considering a gigafactory near Tesla’s in Buffalo.
If we want to accelerate the building of the U.S. solar industry without protective tariffs or carbon taxes, think about an investment tax credit to encourage investment in new very large solar panel plants, not tariffs that will cost jobs and slow down the solar transformation.
An unnecessary high tariff placed on PV panels will cost thousands of jobs in the rest of the solar industry to protect two companies that have already shown they already cannot compete and are not likely to do so in the future.
Roy Morrison’s latest book is “Sustainability Sutra,” published by Select Books.