88,000 Jobs Hang in Balance Awaiting Trump’s Decision
If there is one promise Candidate Trump made to the American people while seeking the highest office in the land, it was to protect and promote American Jobs. President Trump will have a chance to impact more than 260,000 jobs in the near future and could possibly save or destroy an emerging industry. Experts say as many as 88,000 jobs could potentially be lost, eradicating a fast-growing industry. On September 22, 2017, The U.S. International Trade Commission (USITC) voted that Suniva and Solarworld were greatly injured in Section 201 trade petition by Chinese competition on solar products – a decision like that will grant a passage of tariffs on cells and imports of modules.
The case is now being pushed into the remedies phase, where decisions about imposed tariffs will take place. The minimum asking price per watt is $0.78 and $0.40 for cells. This is the phase where real implications on the economy can be made. If an improper decision is put into place, it could wreck American manufacturers and the solar economy as well as ruin foreign relations.
Suniva and Solarworld are asking for a $.40 cent per watt tariff on all foreign-made solar panels, with a minimum cost of $0.78 cents per watt. What do these seemingly small numbers mean? By imposing the tariff, it would nearly double the price of solar panels, which will unfortunately be passed on directly to consumers. This price increase would likely reduce the number of solar installations in the United States and would require companies to lay-off solar installers. Most solar installers do not have degrees and are high-skilled blue collar workers, a demographic that mimics laid off factory workers.
We were honored to recently build a 1 Megawatt power plant in Commerce, TX. This solar farm is bringing millions of dollars in investments to Commerce, and will help nearly 100 homes run completely off of green, renewable power. If this tariff was in place when we were creating this solar farm, it would have increased the panel cost by $400,000 alone – just for the solar panels! 1 Solar Solution plans on doing 10s of Megawatts in solar farms in the years to come, but this proposed tariff could complicate these projects negatively across the board.
If the tariff is implemented as recommended, it would increase solar installation prices by at least 30-40%. Here at 1 Solar Solution, we are currently able to provide our customers a very nice return on investment, usually between 11-15%, and sometimes much higher than that for many residential projects. We also generate impressive return on investment numbers for commercial projects, as we are not limited to creating, implementing and installing just residential systems. That being said, a 30-40% increase in price would reduce the ROI to single digits and thus make solar projects less competitive to thousands of prospective homeowners and business owners as well, who are looking to go solar. Less installs would require us as a company to cut our own staff in all departments, from sales and marketing to operations.
Of course, Suniva addressed this as a victory. In a written statement, the company said that they “brought this action because the U.S. solar manufacturing industry finds itself at the precipice of extinction” due to foreign competition. Because the USITC conceded, the decision about the future of not only American manufactures but also the American economy now rests in the hands of President Trump.
This comes as a true disappointment to nearly 9,000 solar installation companies, including ours. CEO and President of Solar Energy Industry Association (SEIA) Abagail Ross Harper said that Suniva and Solarworld are exploiting “American trade laws in order to gain a bailout for their bad investments”. What makes this matter worse is that they faced consequences based on their own poor business decisions and are now throwing a tantrum about it.
Suniva is owned by parent company Shunfeng International Clean Energy, which is based out of Hong Kong. Meanwhile, Solarworld is owned by Frankfurt based Solarworld AG.
What is going to happen going forward? Many are hoping that the ITC chooses to add very low tariffs or none at all. If that doesn’t happen, the solar industry could lose 88,000 jobs by 2018. It is important that President Trump realizes that most people in the solar industry do not need a college education, and are true blue collar workers. Having that many people unnecessarily unemployed will be extremely hard on the economy and Trump’s administration will have a difficult time recovering from it as well.
The right thing for this administration to do if they truly believe in providing and promoting American jobs is not to impose any tariffs on the solar industry. According to a February 2017 Forbes article (http://fortune.com/2017/02/07/us-solar-jobs-2016/), solar industry jobs grew by 25% in the last 12 months. It would be indefensible to administer such a massive blow to a growing, fast paced industry and instead help two foreign companies trying to salvage their misguided investments. Like many in the solar industry, we’ll be anxiously awaiting the very important decision from the President.