Dubbed a doomsday scenario for U.S. solar by reporters at GTM Research, Suniva’s recent filing of a Section 201 petition could have broad, rippling effects on the utility-scale solar industry in the United States.
If you haven’t heard of this yet, it’s time to listen up. To provide some background before we dive into the implications of this case, in April of 2017 Georgia-based solar cell and module manufacturer Suniva, Inc. filed a petition with the International Trade Commission (ITC) as a reaction to intense competitive pressure placed on the U.S.-based solar manufacturer by foreign producers. This petition, filed under Section 201 of the Trade Act of 1974, is meant to provide global safeguards against “serious injury” to domestic manufacturers from imports. In mid-April, Suniva filed for Chapter 11 bankruptcy. On May 25th, SolarWorld Americas became a co-petitioner in the 201 safeguard case. Earlier in May, SolarWorld AG, parent company to SolarWorld Americas, also filed for bankruptcy.
In Suniva’s petition, they recommended the ITC place a $0.40/W duty on cells and set a floor price of $0.78/W on modules for all crystalline silicon cells and modules manufactured outside the United States. Though Suniva’s requests are just that – requests – a potential price increase of this magnitude would have very material effects on large-scale solar power projects in particular. At the utility-scale level that many corporate buyers are seeking, panels currently trade below $0.30/watt. The requested tariffs could more than double the price for solar panels, crippling two-thirds of projects expected to come online in the next 5 years.
The ITC is currently reviewing Suniva’s case. The process and key dates for the Suniva 201 petition are as follows:
- ITC agrees to review the petition (already agreed)
- ITC decides if “serious injury” did occur (to be decided by Sept. 22nd)
- ITC makes recommendation for remedy if “serious injury” did occur (to make recommendation by Nov. 13th)
- ITC recommendation goes before President Trump to decide on corrective action within 60 days.
The potential impact on the U.S. solar industry is large. The Solar Energy Industries Association (SEIA) pegs this impact on solar industry jobs to be 88,000 jobs lost throughout the solar supply chain. Industry experts at GTM Research suggest solar modules spiking back to 2012 prices if the ITC takes Suniva’s recommendations.
This is a big deal – and not just for stakeholders directly involved in the solar industry. Anyone in the market for solar power, including C&I energy buyers, should pay incredibly close attention to this case as it plays out. For many companies pursuing renewable energy goals, solar power projects have begun to rise to the top of their agendas as they provide competitive economics in many markets. A mandated price increase that applies to potentially all imported solar modules would greatly affect the competitiveness of renewable energy in a market that is clearly eager for a clean power transition.
This industry is constantly changing, making it an exciting, dynamic, and, at times, a lucrative environment in which to do business. The Strategic Renewables team at Schneider Electric – Renewable Choice is already in negotiations with solar developers to gain an even deeper understanding of where the market stands on the Suniva 201 petition, and how potential outcomes could alter risk profiles for companies entering into long-term solar contracts via power purchase agreements. This case serves as a reminder of why C&I buyers choose to work with an advisor who proactively advocates for the best interest of both the buyer and the environment.
Reach out to our team for more information on the Suniva 201 petition and to discuss the unique implications for your organization.
The post Regulatory Update: Suniva 201 Petition, Implications for Solar Buyers appeared first on Schneider Electric.