(TNS) -- A trade decision out of Washington, D.C., on Friday could derail Texas’ momentum as one of the nation’s fastest growing solar energy markets and eliminate thousands of new jobs in the state, industry leaders say.
The U.S. International Trade Commission is scheduled to decide whether the domestic solar cell and solar panel industry needs protection from cheap imports.
The federal agency is responding to a complaint from Georgia-based Suniva and others that the domestic panel and cell manufacturing industry face an “existential threat” as imports have “unexpectedly exploded and prices have collapsed.”
A vote by commissioners to impose tariffs or a price floor would need to be approved by President Donald Trump, making it one of the first major trade decisions for the president who is a vocal advocate of “America First” policy.
A tariff or price floor would help domestic manufacturers but could slash solar-energy growth in half and cost the U.S. 88,000 jobs, including some 6,300 in Texas, according to opponents.
"That would be devastating to our industry," said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.
Texas, which leads the nation in producing energy from wind and petroleum, has recently seen massive growth in its solar energy capacity. As much as 24 percent of the state’s solar capacity was added between April and June.
In terms of capacity, Texas now ranks seventh in the nation, up from 10th a year ago.
Nationally, the industry employees number more than 260,000 -- 9,400 in Texas last year -- even with almost all solar cell manufacturing happening overseas.
Domestic industry spans companies that assemble imported cells into panels, manufacture wiring, build inverters that switch the current from DC to AC and make equipment that allows the panels to track the sun’s path. And, thousands of workers install panels on rooftops and assemble utility-scale solar plants.
Despite the overall industry growth, panel and cell manufacturers like Suniva have struggled. Just before filing its complaint, the company eliminated nearly 200 jobs, stopped making cells and filed for bankruptcy. Suniva is majority owned by a Chinese company.
SolarWorld Americas, which has a solar cell manufacturing line in Oregon joined the case in May. The German-owned company has the last major solar cell manufacturing plant in the U.S.
About 30 manufacturers have shut down or filed for bankruptcy in the past five years, said Tim Brightbill, trade counsel to SolarWorld. He said there was a 60 percent price “collapse” last year caused by too much overseas production capacity.
Brightbill, a partner at the law firm Wiley Rein in Washington D.C., said the U.S. solar industry would continue growing even with tariffs and a price floor. He said the goal is to get prices back to an early 2016 level, before they cratered.
A report by Mayer Brown projected that the industry would add between 114,796 and 144,298 new jobs in the next five years even if the federal government takes action.
“The significant increase in installed US solar capacity, the restoration of US manufacturing and the increase in jobs and US economic output should put to rest any concerns that the 201 petition will damage the US solar market,” according to the report.
On Friday, trade commissioners are scheduled to decide whether domestic solar manufacturers were sufficiently injured by imports to take action. If the answer is yes, that would lead to more hearings and a decision in November about the amounts of tariffs or a price floor. That recommendation would then go to the president for a final decision.
If commissioners reject the two companies' arguments, the case would be dismissed.
The uncertainty about the outcome has led to increased solar prices as companies hoarded cells.
Solar industry growth has been built on technological advances and standardization that’s cut costs and made solar systems more efficient. For some, installing solar panels on their homes could pay off in 10 years or less.
The solar industry previously took aim at China, which the trade commission concluded was dumping solar cells at below cost and set tariffs starting in 2012.
“In this case, there's no allegation of wrongdoing," Hopper said.
Suniva officials said in filings that earlier tariffs on China were ineffective. The Chinese companies avoided the added cost by moving manufacturing to Vietnam, Thailand and Malaysia and other countries.
That’s why Suniva said it filed a “global safeguard petition” asking for protection from all imports.
The company blamed a “global imbalance in supply and demand” that caused U.S. solar cell production to fall by nearly 38 percent from 2015 to 2016. Suniva accounted for 44 percent of domestic solar cell manufacturing in 2016.
Brad Stutzman COO of Dallas-based O3 Energy, described the case as frivolous and unfortunate for Texas, which he said is "on the cusp of taking off."
"They [Suniva and SolarWorld] need to look at best practices and refining their processes in order to be profitable versus trying to drag down the rest of the industry," he said.
Dan Lepinski, a solar design engineer and adviser to the North Texas Renewable Energy Group, said this would inevitably slow down solar growth. But instead of tariffs, he said he’d rather see an easing of U.S. regulations that hurt competitiveness.
“Give our American companies a level playing field,” Lepinski said. “Unburden them. Let them compete on the same footing as the foreign companies, and they will succeed.”
©2017 The Dallas Morning News Distributed by Tribune Content Agency, LLC.