An unfair trade petition filed by a U.S. manufacturer could potentially double the cost of solar panels and hobble the industry, experts say. (Photo By: Getty Images/iStockphoto)
Experts warn that scenario could develop if the International Trade Commission and President Trump side with Suniva, a small Georgia company that says cheap Chinese imports have run it out of business.
"The threat of possible solar tariffs is already making it difficult to bid on contracts to supply solar electricity," said Keith Martin, a project financing expert at Chadbourne & Park, which just merged with the Norton Rose Fulbright law firm in Washington.
Martin was a panelist at a June 26 forum on renewable energy financing at the annual Energy Information Administration conference in Washington.
He said there's "a wall of money" available for utility-scale projects in the U.S. today.
But that could change if Suniva has its way.
The company once employed 350 workers and was named manufacturer of the year by the state of Georgia in 2016.
Now, it's down to about three dozen employees. In April, it filed for reorganization under Chapter 11. Subsequently, Suniva petitioned the ITC, a quasi-judicial federal agency, to impose a tariff of 40 cents per watt on imported solar cells and a floor price of 78 cents per watt on imported solar panels.
With cells currently priced around 34 to 37 cents a watt, that could double the cost of solar in the U.S and contract the industry by 60 percent by 2022, Martin said.
Studies show that co-op members, because of the economic conditions in rural areas, are always disproportionately affected by price increases compared with those that live in urban areas.
The ITC has until September 22 to decide whether imports have caused "serious injury" to domestic solar cell and module manufacturers. Ironically, Suniva is partially owned by a Chinese company.
If it agrees with Suniva, the commission will issue a recommendation to Trump by November 13. He then will have 60 days to decide on a course of action.
Martin said the history of tariff petitions suggests at least some relief for Suniva might be forthcoming. Most recently, the U.S. imposed a 30 percent tariff on steel imports in 2002 to protect domestic steel.
Solar developers have been responding to the possibility of a tariff by acquiring as many panels as possible prior to the Nov. 13 decision date, Martin said.
But there's little question that the flap already is dampening a robust solar market, he said.
"What if equipment costs twice as much as you expect?" he said. "People are being careful about making bids because they don't know at what price they will be able to supply it."