What You Need to Know About Suniva’s Solar Trade Dispute

We look at the current state of Suniva's petition for a minimum price and tariffs on imported solar panels, and where it may go from here.

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UPDATE: The ITC has decided to take on Suniva’s petition, and now SolarWorld has joined the petition as well.

Everyone in the solar industry has heard by now about Suniva’s petition for a minimum price and tariffs on imported solar panels. This request could have potentially large impacts on the solar industry, but most people don’t understand the details of what a section 201 petition actually is.

At this year’s Solar Summit, Shayle Kann, Head of GTM Research, sat down with John Smirnow, International Trade & Customs Attorney, to discuss the details of the request and what may actually happen.

Of note, in this matter Smirnow is representing SEIA, which is actively opposed to Suniva’s petition.

What is a Section 201 petition?

To people unfamiliar with the details of international trade, this request by Suniva seems very similar to the previous anti-dumping request by SolarWorld a few years back. But it’s actually significantly different.

Section 201 states that “… domestic industries seriously injured or threatened with serious injury by increased imports may petition the USITC for import relief.”

So what exactly does that mean?

Unlike the anti-dumping decision, Section 201 doesn’t take fairness into account. It only overlaps with the anti-dumping rules in that it looks to see if an industry is being seriously injured.

The petition is handled by the United States International Trade Commission (ITC). If the ITC finds there is serious injury, they then recommend a remedy based on their research and industry input. That remedy then goes to the President of the United States, who has broad powers to change it and sign, or refuse to sign, it into law.

Additionally, any remedies resulting from the petition apply to all imports, regardless of where they come from.

The last time a Section 201 petition was filed was in 2002, for the steel industry. Smirnow worked on that petition as well, and it resulted in a three-year tariff on imported steel.

What’s Suniva asking for?

There are three requests Suniva made when filing its petition with the ITC. They would like:

  • A minimum price of 78 cents per watt on imported solar panels
  • A tariff on solar cells of 40 cents per watt
  • The collected money to go to a pot that will support the development of domestic manufacturing

These are big numbers, and GTM has predicted that if they were to be implemented, the solar industry would be negatively affected.GTM predicts the number of states at residential solar grid parity in 2018 would drop from 36 to 27. This would be a big deal and definitely slow the industry’s growth.

But Smirnow states these requests by Suniva are basically a wish list.

If the ITC agrees with Suniva that a remedy is needed, they will go back to square one and begin researching what that remedy would consist of. There is a chance they could recommend all of Suniva’s requests, but it’s unlikely they’d come to the exact same remedy Suniva is asking for.

What’s happening now?

At the moment, the ITC is reviewing Suniva’s petition and deciding if it meets the requirements of Section 201.

The big thing Suniva has to show is that it’s representative of the domestic industry. This could prove a sticking point, because Suniva only represents about 22% of the industry. Smirnow believes the ITC is likely concerned this is not high enough, and SEIA’s stance is that it doesn’t meet the standard.

This could change, though.

If another big company comes out in support of this petition, the ITC may decide to move forward with the investigation. SolarWorld hasn’t released a statement on this yet, but if they support it, the petition will likely move forward.

What happens next?

If the petition is not accepted by the ITC, everything stops here. There will be no further investigation and no changes.

But if the ITC does take on the petition, that’s when the real work begins. A six-month timeline begins, where the ITC will investigate if serious injury has occurred and if so, recommend a remedy.

Over a four-month period, the ITC will look into whether serious injury occurred. They will be looking at three main things to make this decision:

  1. Volume – The ITC will be looking to see if the amount of imports has increased substantially.
  2. Price – They will look to see if there was actual damage caused by price declines, and if these declines repressed the market.
  3. Impact – They will look to see if imports are the main cause of injury to the industry.

Smirnow believes that if this case is initiated by the ITC, it’s likely that injury will be found.

If injury is found, the ITC has two months to come up with a remedy. This is where SEIA would get directly involved. As an industry representative, they can argue on how a proposed remedy will affect the industry. They can also recommend their own solutions to help the industry.

Once the ITC agrees on a remedy, it goes to the president to review. The remedy is just a recommendation to the president about what to do. If the president signs a remedy, U.S. Customs has 15 days to set up any tariffs, which it will then begin implementing.

What’s the likely outcome for this petition?

The ITC should respond to this petition in the next few weeks. Due to a number of uncertainties currently, Smirnow doesn’t know what the ITC is likely to do.

But if the petition is taken on, Smirnow believes that the ITC will find injury. At that point, a tariff of some kind, or a proposed alternative, is likely to be implemented.

This potentially has big consequences for the solar industry, so we’ll be following it closely as it develops.