As a big storm brews in the solar industry while it awaits the U.S. International Trade Commission's decision on whether to raise trade barriers against solar imports, this week companies, countries and trade groups lobbied the ITC hoping to influence its decision. On today's The Cutting Edge, E&E News reporter David Ferris explains how one company's actions have affected an entire industry.
Monica Trauzzi: Welcome to The Cutting Edge. There's a big storm brewing in the solar industry as it awaits a decision by the U.S. ITC and Trump administration on whether to raise trade barriers against solar imports. E&E News reporter David Ferris has been following the story very closely.
Thanks for joining me, David. Nice to see you here in town in Washington.
David Ferris: Good to see you. Glad to be here.
Monica Trauzzi: So David, this has been an ongoing drama that began with Suniva filing for bankruptcy and subsequently petitioning the U.S. ITC to impose tariffs on solar cell and module imports. Some major drama followed. What happened?
David Ferris: As a journalist you want to get on a story that ties together a lot of threads of what's happening at the present time. This is a story that combines manufacturing with trade, with jobs, with energy, with climate and with Donald Trump. So it's a really fascinating story I think for the whole energy and climate world to be following for that reason.
What happened was so Suniva, the company that filed this suit, is one of only two surviving manufacturers of the basic equipment that makes up solar panels; solar cells and, to a smaller extent, solar modules which were made of cells.
It went bankrupt in April, and as part of its Chapter 11 reorganization plan, it staked its survival on filing and winning a case before the U.S. International Trade Commission using this rarely invoked law. It's only been invoked once in the last 17 years where it asks for trade protection against the entire world. Not just against one country, but it creates a moat around the U.S.
Also, the decision for what happens ultimately rests with the president and not with some committees or bureaucrats. So it has really transfixed the solar industry because it has set Suniva, that one solar manufacturer, plus another one, SolarWorld, that makes the basic equipment against the whole rest of the solar industry, which uses cheap imports from China. Cheap imports that are the exact thing that undercut U.S. manufacturing and have put U.S. solar manufacturers behind the lifeline.
Monica Trauzzi: It's a pretty complex story. What do you find most unusual about it?
David Ferris: Well, there's a lot more to this story than meets the eye. There's a lot of boardroom and money drama involved in this story. A big part of it is that Suniva itself strangely enough is actually owned by a Chinese company.
This is a trade case filed with the Trump administration that rails against Chinese imports, yet the company itself was bought by China in 2015. That company, Shunfeng from China, has lost control of the company to a capital firm in New York that's now driving the bankruptcy.
Another curious thing is that Suniva has long trumpeted that it's a Buy American manufacturer where it claims to source 80 percent of its material from the U.S., but its own bankruptcy documents show that of the $38 million that it owes to its top creditors, almost all of it is not to American companies, but to the very countries that Suniva wants to keep out; South Korea, China, Taiwan, Canada, Germany.
So it's going to be really interesting to watch how this story unfolds both in front of and behind the scenes.
Monica Trauzzi: How is this impacting the stability of the broader solar industry? I know that it seems like the industry is solely watching this case unfold.
David Ferris: Right. It depends on what you mean by the stability of it because the U.S. invented solar. This is an industry we owned and we lost to China over the last less than a decade.
So these two manufacturers are saying, "Wait a minute. We are the sole representatives of the manufacturing of this." Donald Trump loves manufacturing, but the whole rest of the industry has come to rely on imports, which have been a huge part of solar's price dropping to the point where it can compete with natural gas, to the point where solar installations can be installed in a way that reduces the effects of climate change.
There's also the jobs issue. In cell manufacturing we have maybe a couple thousand jobs, but the whole solar industry employs about 260,000 people. All those jobs would actually be threatened if tariffs were to be raised and the cost of solar went up.
Monica Trauzzi: So there's been some lobbying happening this week by companies, trade groups, countries. What have they been saying?
David Ferris: Well, there are a lot of people hopping in now, now that it's serious this train is leaving the station. You're seeing everyone lawyering up on this issue from foreign trade groups, from Korea and China and Canada to big, well-known U.S. companies like Tesla, which bought SolarCity last year and is now one of the biggest players in solar in the country. Sunrun, which is another one of the big solar installers and various other solar companies throughout the supply chain.
Monica Trauzzi: A lot of money at stake.
David Ferris: A lot of money at stake.
Monica Trauzzi: When could we see a decision from the ITC and then eventually the Trump administration?
David Ferris: It's all on a very fixed schedule. It's on its way inevitably to Donald Trump's desk. The ITC is going to make a decision by September 22nd about injury, which is there a reason to think that U.S. industry was harmed by imports? They will forward their decision to Donald Trump by November 13, keeping in mind that regardless of what the trade commission says, Donald Trump can do whatever he wants, and who knows what that's going to be.
Monica Trauzzi: Right. You'll continue watching it and reporting it?
David Ferris: I will.
Monica Trauzzi: Thank you. Nice to see you. More Cutting Edge coming next Friday. We'll see you then.
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