Bloomberg Businessweek - USA (2020-01-27)

◼ TECHNOLOGY Bloomberg Businessweek January 27, 2020

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PHOTOGRAPHS

BY

KELSEY

MCCLELLAN

FOR

BLOOMBERG

BUSINESSWEEK.

ILLUSTRATION

BY

JOEL

PLOSZ

Q CellsAmerica,thelocalarmofa SouthKorean

manufacturer.“ItisanexistentialthreattoU.S.

solarmanufacturers,”hesaidina statement.In

December,U.S.tradecourtJudgeGaryKatzmann

issueda preliminary injunctionfreezingthe

administration’seffortstorollbacktheexemp-

tion,sayingthegovernmenthadn’tfollowedthe

proceduredueanysuchmove,includingprovid-

ingadequatetimeforpubliccomment.

Forallthechaosthetariffsandexemption

havesown,thepolicieshaveencouragedsome

newU.S.manufacturing.A fewsolarpanelfacto-

rieshaveopenedintheU.S.inthetariffs’wake.

Still,thevastmajorityofU.S.solarjobsaren’tin

manufacturing.

Theindustryis negotiatingwiththeadminis-

trationtoresolvetheexemptionwithdrawal,but,

if a commentperiodisrequired,it mayremain

inplaceforatleasta fewmoremonths.Inthe

meantime, theeconomics continue to favor

panelsmadeoutsidetheU.S.,saysJigarShah,

co-founderofthegreenventurefirmGenerate

CapitalInc.“There’snoway,”hesays,“tomake

solarpanelshereascheaplyasyoucaninAsia.”

�BrianEckhouseandAriNatter,withJustinSink

THE BOTTOM LINE In an effort to appease hurting developers of

solar power plants, the Trump administration has also let China’s

panel makers easily avoid its punishing tariffs.

outdomesticU.S.manufacturing,meaningthe

WhiteHousecouldsatisfyailinghomegrownpanel

makersaswellasitsfavoredfossilfuelindustries

bymakingtheChinesemodelslesscompetitive.

Theadministrationhadsolarpanels—including

bifacials—among its first set of tariffs in early 2018.

The tariff started at 30%, with annual decreases

scheduled in years two through four. (Those

decreases are among the potential subjects of the

scheduledtariffreview.)

Eventhethreatofthetariffspushedmany

utility-scale developers to delay or temporar-

ily shelve solar plant projects as early as 2017.

TheSolarEnergyIndustriesAssociation,a trade

group,pushedforanexemptiononheftybifacials

usedinutility-scale solar farms. (Such panels can

weigh more than 70 pounds, and they’re up to a

third longer than residential models.) For more

than a year, a group representing about a dozen

major solar farm companies lobbied Washington

for the move, including executives from Southern

Current, SPower, Clearway Energy Group, and

Cypress Creek Renewables.

Some proponents were skeptical they’d get

the exclusion, but the Department of Energy

seemed more receptive than the Department of

Commerce to their argument: that big bifacial pan-

els represented an obscure but critical market that

American companies could turn into a mainstream

business. “This is the chance to bring back the man-

ufacturing base,” the argument went, according to

Bret Sowers, a vice president at Southern Current.

They framed the exemption as harmless to mak-

ers of residential panels, because the bigger bifacial

modules are tough to put on the roof of a typical

home. At the time, there were few in circulation,

and vanishingly few made in the U.S.

The Energy Department didn’t respond to

a request for comment, and the Commerce

Department deferred to the Office of the U.S. Trade

Representative, which didn’t respond, either.

In June, solar advocates thanked Trump for

grantingtheexemption,buttheysoonrealized

they’dwonmorethantheybargainedfor—that

insteadofsparingonlytheutility-scale bifacial

panels, the administration had exempted all bifa-

cials. The day after the exemption was made pub-

lic, BloombergNEF, which researches clean energy

markets, estimated that motivated Chinese man-

ufacturers could convert single-sided production

lines to produce bifacials if they were willing to

shut down production for two months.

Neutering the tariffs, the broad exemption

has been a disaster for U.S.-based panel makers,

said Andy Munro, general counsel of Hanwha

1/2016 11/2019

$800m

400

0

DATA: BLOOMBERGNEF

Hot and Cold on Asian Solar

U.S. imports of photovoltaic products from Asia tracked by BloombergNEF

① A U.S. company,

Suniva, requests

a tariff on cells

and panels

② 30%

tariff

enacted

③ Tariff

drops to 25%,

per schedule

④ Exemption for

bifacial panels

approved