Thursday, August 17, 2017

Does Steve Bannon’s China Tirade Tell Us Anything About the Solar Trade Case Outcome?

White House Chief Strategist Steve Bannon (unwittingly) gave an interview this week, saying America is locked in "an economic war with China."

Bannon mentioned arcane sections of the 1974 Trade Act to penalize China for alleged steel and aluminum dumping. Could solar be on the list, too?

Bannon's comments suggest he's also paying attention to Section 201 of the trade act -- which is the foundation of Suniva and SolarWorld’s case for slapping severe penalties on imported solar cells and modules from Asia and the rest of the world.

Those companies, plus dozens of other heavy hitters in solar, were in Washington this week to argue their case in front of the International Trade Commission.

In this week's show, we’ll have the latest on solar trade politics.

Then, we'll dig into a fascinating new study on second-order climate beliefs. It’s not just about what you believe -- it’s about what you believe others believe.

Finally, we’ll revisit the rise of non-wires alternatives. More utilities are opting for distributed resources in place of traditional wires upgrades on the grid. We’ll discuss a new project in Arizona and then look across the landscape of other projects.

This podcast is sponsored by Mission Solar Energy, a solar module manufacturer based in San Antonio, Texas. Visit Mission Solar at the upcoming Solar Power International conference at Booth 3975. You can find out more about Mission’s American-made, high-power modules at

Recommended reading:

  • GTM: The Messy Politics Surrounding the Solar Trade Case
  • GTM: War of Words: Top Quotes From the Solar Industry’s Latest Salvo Over Trade
  • Harvard study: The Importance of Second-Order Opinions for Climate Politics
  • GTM: APS Buys Energy Storage From AES for Less Than Half the Cost of a Transmission Upgrade

from GTM Solar

War of Words: Top Quotes From the Solar Industry’s Latest Salvo Over Trade

On Tuesday, more than 40 witnesses spoke in front of trade commissioners in Washington, offering up their thoughts about a controversial petition submitted by Suniva and SolarWorld.

The two bankrupt solar manufacturers are lobbying for harsh penalties on imported solar panels. Most others in the U.S. solar industry want commissioners to squash the case, afraid of the downstream consequences.

The commission is expected to complete its investigation of the Section 201 petition by September 22. In the meantime, we’ve compiled some noteworthy quotes to give readers a sense of how the day played out.

To set scene, let’s begin with Suniva and SolarWorld’s rationale for why the U.S. needs solar import tariffs and price minimums.

Suniva’s attorney, Matthew McConkey:

“If there’s ever been a 201 case where a finding of serious injury is warranted, it’s this one,” said McConkey, during his opening remarks. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities.”

“The data set forth in the Commission’s staff report reveals a domestic industry that is literally on the precipice of being extinguished. U.S. module manufacturers suffered net losses exceeding a billion dollars over a five-year period,” said McConkey. “If this isn’t serious injury, then that concept has no meaning.”

“Even as U.S. demand for solar products increased from 2012 to 2016, foreign suppliers -- including those in China, Korea, Canada and Malaysia -- began capturing an even larger share of the U.S. market. But then we saw module prices drop by a third in the second half of 2016, during a year when all imports increased by 50 percent from the previous year.”

SolarWorld’s attorney, Tim Brightbill:

“As the Commission is well aware, the domestic industry in this case has been largely wiped out by the global import surge,” said Brightbill.

“There is massive global over-capacity among many producers. In addition […] foreign producers have production operations in multiple countries and are able to shift that production and those exports, rapidly, from country to country.”

Juergen Stein, CEO of SolarWorld:

“The domestic solar manufacturing industry has been driven to the brink. Relief under Section 201 is our last hope,” said Stein. “Unless we act promptly and decisively, the United States may find itself with no solar manufacturing sector left at all.”

“Solar cell and module prices fell in 2016, even as the price of polysilicon -- the most valuable raw material within a cell -- was rising. This is an unsustainable situation, and what I would call ‘the circle of death.’”

“We had to let go many workers, who had been with the company for many years. These job losses should not be happening in an industry where demand is so strong and good profit margins are a given in the overall value chain.”

Dozens of solar industry experts and executives attempted to debunk the petitioners’ claims. Multiple witnesses portrayed Suniva and SolarWorld as subpar companies that had failed to adapt to the fast-paced solar industry.

Matthew Nicely, attorney for the Solar Energy Industries Association (SEIA) and SunPower:

“Have some companies failed? Yes. But that’s the core nature of a high-tech industry. You must innovate to keep up and deliver quality, reliable products at scale. The petitioners have failed badly, and their failure has nothing to do with imports.”

“That the two petitioners would even bring this case demonstrates their poor business judgment and their hubris. They seek a public remedy for their own private failing. If successful, they will undermine the hard work and innovation that is making solar a viable alternative to conventional energy sources.”

Craig Cornelius, senior VP of Renewables for NRG Energy:

“Neither of the petitioners in this case had a product that they offered at [our] specifications, and certainly not at the scale or quality we required. In addition to this inability to meet our essential technical requirements, there were other reasons why we, and other purchasers like us, were unable to purchase products from the petitioners during the period of investigation.”

James Lamon, CEO of Depcom:

“Depcom’s experience with SolarWorld was unsatisfactory,” said Lamon. “Depcom had to exert oversight and pressure to get SolarWorld to deliver its product, which was never delivered on time -- a product we believed that was made in America […] when in fact, per the label on the modules, was manufactured in Germany and Thailand.”

Thomas Prusa, chair of the economics department at Rutgers University:

“Imports are always dominated by one or more factors. As shown in the residential market, imports are near the bottom of the list of factors, dominated by grid parity issues and technology-driven cost changes. The utility market is also similar,” said Prusa, referring to the results of an economic study. “In summation, empirical analysis formally rejects the claim that imports are the most important cause for declining prices over the period.”

Other opponents spoke of the damages that tariffs would have on the larger solar industry.

Amy Grace, head of North America research for Bloomberg New Energy Finance:

“Utility-scale solar must be competitive with the operating cost of an efficient natural gas plant -- roughly $20 to $30 per megawatt hour -- or it will not be built,” said Grace. “It is now price-competitive with wind and wholesale power in several parts of the country, but just barely.”

“Any increase in the price of solar offered to electricity purchasers […] would result in fewer contracts being signed and lower solar deployment.”

Tom Werner, president and CEO of SunPower:

“We have more than 14,000 direct and indirect workers,” said Werner, who described his company as the country’s second largest solar provider. “These workers would be vulnerable to solar market decline.”

“Tariffs would adversely impact the U.S. economy, burden domestic manufacturers and suppliers […] raise prices for customers and eliminate tens of thousands of jobs.”

Matthew Nicely, attorney for the Solar Energy Industries Association (SEIA) and SunPower:

“Solar is an American success story whose future remains bright. Its continued success could be destroyed by the misguided actions of the two petitioners and their small group of supporters.”

The commission also heard testimony from government officials from Minnesota, North Carolina, Georgia, Maryland and Virginia. All spoke against the petition, except for the mayor of Norcross, Georgia, which was home to Suniva’s headquarters and one of its cell plants.

Bucky Johnson, Mayor of Norcross, Georgia:

“Suniva became part of the DNA of our city, until there was a turn in the story,” said Johnson, noting nearly 300 jobs were lost in Norcross due to Suniva's bankruptcy. 

“I sadly learned there were other communities that experienced the same impact as Norcross,” he continued. “Do all that you can do to give Suniva a fighting chance.”

Jason Saine, North Carolina State Representative:

“Imposing tariffs on imported modules is not the way to go […] the remedy would do more harm than good here.”

Lauren McDonald, member of the Georgia Public Service Commission:

Import duties will “deprive consumers of the benefit of competitively priced solar projects,” said McDonald. “Any tariffs imposed would distort the market, threatening tens of thousands of American jobs.”

“[Suniva and SolarWorld] are here because their products are not economic and their business model is not competitive.”

Representatives for half a dozen countries and the European Union took turns explaining why their nations should be excluded from solar import duties.

Reynaldo Linhares Colares, second secretary for the Embassy of Brazil:

The World Trade Organization’s Agreement on Safeguards “states safeguard measures shall not be applied against a project originating in a developing country member, as long as its share of imports […] does not exceed 3 percent,” said Colares.

Brazilian solar exports from 2012 to 2016 “accounted for only 0.01 percent of the total value imported by the USA in the same period,” he continued. “Therefore […] imports from Brazil should be excluded.”

Carrie O’Brien, trade policy counselor for the embassy of Canada:

“The Canadian and U.S. supply chains are integrated and complement one another,” said O’Brien. “The imposition of duties on solar products would risk undermining this important relationship, negatively impacting both Canadian and U.S. industry and consumers.”

“The imports from Canada must be excluded from any safeguard measure if they do not account for a substantial share of total subject import, and they do not, in this case,” she said, referencing a provision of the North American Free Trade Agreement (NAFTA).

While the vast majority of witnesses opposed the tariffs, a handful of solar executives testified in support of Suniva and SolarWorld.

Edward Harner, chief operating officer of Green Solar Technologies:

“Absent much-needed trade relief, these import trends will only worsen,” said Harner. “Without relief, I am concerned that foreign producers will complete their goal of eliminating U.S. competition.”

Steven Shea, former vice president of Beamreach Solar:

Beamreach “could not keep pace with the rapid reduction in market prices driven by imports -- first in China, and then from countries like Taiwan, Vietnam, Malaysia, Korea and others,” said Shea, whose solar manufacturing company employed 100 workers in California before going bankrupt in January.

“Beamreach was a well established company,” said Shea. “However, this flood of imports, and the resulting price collapse starting in 2016, eroded Beamreach’s competitiveness in a matter of merely months.”

Representatives for Suniva and SolarWorld rejected allegations that they had been responsible for their own bankruptcies.

Suniva’s attorney, Matthew McConkey:

“Arguments have been raised […] that Suniva and SolarWorld somehow brought their gargantuan problems on themselves. Not only are these arguments factually false, they’re offensive,” said McConkey.

“The almost 30 members of the domestic industry that have gone out of business in the last five years -- as well as Suniva and SolarWorld -- all of them made bad business decisions or substandard products?” he asked, incredulous. “Please.”

Seth Kaplan, president of International Economic Research:

“The issue is that prices were falling faster than costs, causing serious injury,” said Kaplan. “The idea that the semiconductor industry, at large, is barred from Section 201 relief because technology improves over time is, frankly, nuts.”

SolarWorld’s attorney, Tim Brightbill:

“For part of today, we heard an inaccurate smear campaign of SEIA,” said Brightbill. “How do you scale up when you’re under an avalanche of imports?”

The panel of four commissioners, comprised of two Republicans and two Democrats, spent hours questioning both sides.

Questions to petitioners:

“What would you recommend might help the broader solar industry?” asked Commissioner Meredith Broadbent.

“Our goal is to put a remedy in place that assists U.S. manufacturing […] and continues to encourage solar growth in the United States,” said Brightbill. “We value manufacturing jobs. We value all jobs in the solar industry.”

“We’re not out to kill the industry,” answered Matt Card, Suniva’s VP of Commercial Operations. “We are very open to a solution that works for all parties.”

“In your fact sheet […] you estimate that U.S. solar cells and module manufacturing employment would increase between 37,500 and 45,500 workers. These job increases are substantial,” said Broadbent. “What would occur on the ground that would result in this job growth?”

“The assumptions that go into those job estimates are that there is new investment in cell and module production capacity that would raise U.S. cell capacity to 3 gigawatts per year and module capacity to 3.6 gigawatts per year,” said Warren Payne, an international trade adviser for the law firm Mayer Brown, which conducted the jobs analysis.

“And that could happen in four years?” asked Broadbent.

“Yes,” said Payne. “The industry has the ability to scale up rapidly.”

“What inspired Suniva and then SolarWorld to revive the use of the dormant Section 201 global safeguard law?” asked Vice Chairman David S. Johanson, noting it had not been used in a case since 2001.

“Whack-a-mole,” said McConkey, who explained that companies would keep popping up in new countries to circumvent anti-dumping laws. “We would be chasing this product all around the world.”

Questions to petition opponents:

“What accounts for the substantial number of module assemblers leaving the U.S. industry over the period of investigation?” asked Broadbent.

“There are a variety of reasons,” said Nicely. “There are many instances in a high-tech industry in which companies bet on the wrong technology, and they invest a lot of money in technology that doesn’t work out. To then turn around and blame that on imports is a bit of a stretch.”

“What are we to make of all the domestic plant closings since 2012?” asked Johanson. “What does this tell us about the state of the domestic industry?”

“The predominant reason we saw the failures is you didn’t have scale with a lot of these companies when they came in. A lot were startups and new ideas,” said Dan Shugar, founder and CEO of California-based NEXTracker. “You didn’t have large companies making big, sustained investments to getting their products fully qualified […] so that they would develop a long-term sales model.”

“I heard people were talking about shortages right now. Is that in the U.S. market?” asked Commissioner Irving Williamson.

“Yes. Particularly buyers trying to buy in the spot market right now are seeing significant price escalation and difficulty in supply, from what we’ve heard in the market,” said Ed Fenster, co-founder and executive chairman of Sunrun Inc.

“SolarWorld suggested a variety of countries invested in CSPV (crystalline silicon photovoltaic) capacity in response to the anti-dumping and countervailing duty orders on China and Taiwan. Do you agree that this was the reason? Why did they invest in such capacity in countries that do not have a sizable home market demand for solar products?” asked Broadbent.

“We have multiple places where we make modules,” said Thomas Werner, president of SunPower. “We have those sites compete and then share best practices, and I think that’s part of what you’re seeing here.”

“We made our decision to invest in Singapore in 2008,” said Steven O’Neil, chief executive officer of REC Solar. “The market there is small, but we set up there because of the access to all global markets […] and proximity to raw materials, so we could export around the world.”

For more on the politics surround the case, read our earlier coverage.

from GTM Solar

Study: We’re Still Underestimating Battery Cost Improvements

Batteries have been beating expectations in recent years as costs continue to fall. That's good news for the storage industry, but reveals a shortcoming in the scientific understanding of the trend.

That discrepancy prompted Berkeley professor Daniel Kammen to devise a new model, recently published in Nature Energy -- and it ended up predicting future cost declines at a pace faster than previous analyses.

Scholars have modeled clean energy cost declines based on single factors, like annual production or cumulative production. These one-factor models approximate reductions from learning by doing: the more an industry deploys its product, the better it gets at it.

These models have a high explanatory value, but they didn’t see recent battery cost drops coming. They overestimate lithium-ion costs in the 2010-2015 period, the most recent years in the data set Kammen and his colleagues examined.

Their new model explains cost as the function of two variables, production volume and cumulative patents issued under the international Patent Cooperation Treaty.

When the researchers plugged in the latest battery production forecasts, with the assumption that patent activity continues at the average rate from the last five years in the dataset, they found a striking prediction.

“We find lower cost reductions than existing forecasts in the literature, which in the past has found a systematic underestimation of falling electric vehicle battery costs,” the study says.
At the battery pack level, lithium-ion needs to hit the $125 to $165 per kilowatt-hour range to compete with internal combustion engines (based on 2015 gas prices). The two-factor model predicts EV cost-competitiveness will arrive between 2017 and 2020. This is earlier than the previous literature predicts.

The model also covers solar with batteries. If the solar industry U.S. hits the Department of Energy SunShot goal of deploying PV for $1 per watt (which it has for large projects), residential solar-plus-storage will be widely competitive by 2020. The combination would offer a levelized cost of energy of $0.11 per kilowatt-hour.

That would transform residential storage from a niche item for powering wealthy homes during blackouts into a cost-effective investment for anyone who pays a lot for electricity.

Since the model includes both deployment and research, the scientists could toggle the dials of those two variables to see how one fares without the other.

Scientific innovation comes out on top.

In one test, the authors scaled down the rate of patent development by one-third. To still beat the energy storage cell cost of $100 per kilowatt-hour by 2020 in this scenario, the industry would need to deploy an additional 307 gigawatt-hours globally.

Keep in mind that Tesla’s Gigafactory aims to produce 35 gigawatt-hours, and it’s not yet completed. Deployment alone is not a practical way to achieve cost declines if scientific innovation drops off.

“At the most extreme case of no new innovation, the opportunity cost of meeting cost reduction targets through deployment alone would be extremely high, in exceedance of $140 billion through 2020,” the authors write. 
That point is more than academic. The Trump administration has proposed sweeping budget cuts across the Department of Energy, which has traditionally spurred energy innovation through research funding.

Reports surfaced this week of impending layoffs on the order of 525 jobs at the national labs run by the DOE. Labs in that network performed groundbreaking early stage research that led to the commercialization of lithium-ion technology, and continue to break ground on the sort of next generation chemistries that could spur the “learning by innovation” described in Kammen’s model.

“Right when batteries are doing this great stuff, we’re seeing a trail-off in investment,” Kammen said. “We need the Department of Energy to step up, we need the private sector.”

The White House has signaled the opposite intention, although the DOE retains stronger support in Congress, which ultimately controls the budget.

If there's a bright spot here, it's that lithium-ion costs are following the path of solar, only faster.

“For the same amount of money invested and patents generated, batteries are equal to or ahead of where solar was,” Kammen said.

To keep up that pace, he added, it will be important to maintain a robust research ecosystem with many different labs, companies and universities competing for funds and patents. When money gets concentrated in a few monopolies, they tend to under-innovate.

It also helps that storage has an array of viable technologies, although lithium-ion has dominated the market thus far. This diversity bodes well for continued innovation.

from GTM Solar

Wednesday, August 16, 2017

Who Wins When Bifacial, Thin-Film CdTe and Crystalline Silicon PV Face Off in the Field?

Solar module manufacturers one-up each other on a regular basis in the quest for the world’s most efficient panel. The results usually come out of laboratories, where the modules undergo precise testing in a controlled environment at standard test conditions (STC).  

In the real world, however, the picture is more nuanced. Field conditions are far different from lab environments.

New results from a recent series of field tests highlight the variation that occurs when technologies are tested side-by-side in different regions, where array design and siting, temperature, humidity, and a variety of other factors influence performance.

Three module test labs, DNV GL, TÜV Rheinland Photovoltaic Testing Lab and Celestica, tracked the performance of 2-kilowatt systems that use one of three technologies: thin-film cadmium telluride (CdTe), n-type silicon bifacial or crystalline-silicon (c-Si). Modules were selected at random by the labs.

Test sites in Davis, Calif., Tempe, Ariz. and Toronto each had eight or nine systems with a mix of the different technologies. Data from the arrays were collected for at least a year.

Graph: Average monthly array yield by location. Source: TUV Rheinland.

The CdTe panels, supplied by First Solar and the first generation B245 bifacial panel (bifacial-1) produced by Prism Solar performed best in the two hotter environments. The results of the field study lend credibility to technologies that are gaining traction in the market beyond the c-Si, which makes up the majority of solar panels today.

In Tempe, more than 90 percent of the energy yield was produced at temperatures higher than 25 degrees Celsius and the highest energy generation happened above 45 degrees Celsius.


Graph: Average monthly array yield from May 2015-2017 in Tempe, Ariz.. Array 1 Prism bifacial; Array 3 unnamed Bifacial; Array 2, 4, 5 c-Si; Array 6-9 CdTe. Source: TUV Rheinland.

The two different bifacial panels show that performance varies by supplier and location, with Prism’s bifacial panel far outperforming the unnamed competitor in Tempe, while the other panel provided a slightly higher performance ratio in Toronto. Bifacial panels can produce power from both sides of the module, capturing direct and indirect sunlight.

There are various factors that drive bifacial performance, with albedo (the amount of solar energy reflected off of a surface) and row spacing being two important contributors. There is currently no industry consensus on rating methodology for bifacial modules, and manufacturers are using different methods.  

At SNEC 2017 in Shanghai in April, bifacial panels were seemingly everywhere, according to GTM solar analysts who attended. Editors at PV Tech commented that given the major players showing off their bifacial panels at SNEC, “a recent niche product could be set for the mainstream, very shortly.” 

However, the industry needs to solve several key issues, which are limiting bifacial acceptance, prior to bifacial modules being adopted for large-scale usage.

The field study also backs up First Solar’s competitive advantage claims over traditional crystalline silicon technology. CdTe modules performed well at higher temperatures compared to C-Si modules in Tempe due to the better temperature coefficient of CdTe, the TUV Rheinland study found. The CdTe modules had STC efficiencies close to those of c-Si ranging from 13.2 to 14.7 percent. The variability between the First Solar array performance represents the improvement in efficiency and energy yield from Series 3 Black Plus through its Series 4-2.

Even in Davis, where temperatures are not quite as hot as Tempe, most of the arrays spent at least half their time at temperatures at 25 degrees Celsius or above. Because of those high temperatures, the Davis CdTe arrays also had a performance ratio higher than the average of c-Si panels.


Graph: Average monthly array yield from May 2015- April 2016 in Davis, Calif.. Array 1 Prism bifacial; Array 2, 7-9 c-Si; Array 3-6 CdTe. Source: TUV Rheinland.

The picture was more muddled in the relatively cold environment of Toronto. The unnamed bifacial panel had the highest average annual DC efficiency of 17.17 percent among all the arrays, while CdTe-1 had the lowest efficiency of 12.82 percent, while another CdTe system had the second highest efficiency of 14.45 percent. 


Graph: Average monthly array yield from June 2016- May 2017 in Toronto. Array 1 Prism bifacial, Array 2 unnamed bifacial, Array 3 c-Si, Array 4-7 CdTe. Source: TUV Rheinland.

The findings from the reports do not upend conventional wisdom, but they do highlight the regional variation for each technology in real world conditions. The results also suggest the potential threats that traditional c-Si technology could face as technologies continue to fall in price due to higher volumes, lower balance of system costs, and greater market recognition.

This article was sponsored by TÜV Rheinlanda global leader in independent inspection services. TÜV Rheinland inspects technical equipment, products and services, oversees projects, and helps to shape processes and information security for companies. Since 2006, TÜV Rheinland has been a member of the United Nations Global Compact to promote sustainability and combat corruption. 

from GTM Solar

Can the World Bank Group’s Scaling Solar Program Unlock Utility-Scale Projects in Emerging Markets?

A solar program from the World Bank Group will lead to over 1.2 gigawatts of competitively-priced utility-scale solar PV in Zambia, Senegal, Ethiopia and Madagascar in the coming years, according to new research.

Despite criticism from local developers, the program is a breakthrough risk mitigation and advisory mechanism that offers global solar developers a chance to secure a foothold in new markets with high growth potential and low rates of energy access.

GTM Research and Blue Horizon ECS are out with a new report on WBG's Scaling Solar Program, finding it could be a catalyst for emerging markets.

The Scaling Solar Initiative is designed to address utility-scale solar project development challenges in emerging markets through a transparent auction overseen by the International Finance Corporation, with a pre-screened project site and standardized contracts. Its aim is to support the procurement of utility-scale solar PV projects through a one-stop shop for turnkey advisory and due diligence, as well as standardized contracts that can be used by "any government and any bidder and any bank."

The program also leverages risk reduction products from WBG to allow countries with high perceived risks and limited institutional capacity to benefit from solar PV project financing (typically LIBOR + single-digit market rates for 17-19 year terms).

Scaling Solar made headlines in June 2016 when a First Solar-Neoen consortium were awarded a bid of USD $0.0602 cents per kilowatt-hour (non-indexed) for the 54 megawatt-DC West Lunga project site, less than one year after signing the initial MOU with the Zambian government.

FIGURE: Zambia’s solar PV bid prices for 25-year PPA in June 2016

Source: Evaluating the World Bank Group’s Scaling Solar Program

Addressing barriers to utility-scale solar in these markets

Development of new utility-scale projects in these markets face a number of challenges, which have made it difficult to execute bankable and competitively priced projects in the past. These challenges include non-transparent procurement, questionable offtaker credibility, non-cost reflective tariffs, exchange rate volatility, and overall lack of a stable institutional framework with strong regulatory support.

Organizations within WBG offer several support products to address some of these challenges and de-risk projects for developers, investors and governments.

Offtaker payment risk, for example, is a common challenge in markets where the state-owned utility sells electricity below the cost of supply and may have a conflict of interest to give preference to its generators rather than independent power producers if surplus supply exists. Similarly, the WBG insures against political risks such as government seizure of the project site or other contract breach.

FIGURE: Overview of pre-packaged scaling solar support products

Source: World Bank Group

Criticisms of the Scaling Solar Program

The program has come under criticism from some who say it hinders local developers in favor of vertically-integrated global players that can offer more competitive pricing and may not have otherwise had interest in projects in Scaling Solar markets.

For example, the Zambia bid set a price benchmark expectation elsewhere in Africa that may limit developers in other markets. Developers are citing difficulties with regulators expecting similar prices or holding out on approving project licenses because of an expectation that there may be an MOU with Scaling Solar announced soon.

But while Scaling Solar may delay or threaten procurement for some share of nascent local developer pipelines, the solar industry is not a zero-sum game.

There are other market development drivers in the region, such as a the recently successful NamPower tender in Namibia, which resulted in a 45.5-megawatt contract awarded to Alten Developments Africa at NAM 0.807 per kilowatt-hour (USD $0.060 per kilowatt-hour) -- slightly less than the leading Zambia bid without the risk-mitigated bidding environment Scaling Solar provides. The Scaling Solar program also does not address the distributed segments of these markets.

Also, if initial projects backed by IFC demonstrate that utility-scale projects can be procured competitively and built on time, they are likely to pave the way for more utility-scale development down the road. Future refinement of the Scaling Solar program may take some of these considerations into account along with further encouragement of a sustainable local industry in each of these markets.

Future outlook of Scaling Solar in Africa and Asia

As the program continues to progress in Zambia, Senegal, Madagascar and Ethiopia, IFC is also currently in negotiations with 12 more countries to set up Scaling Solar tenders under advisory mandates, including governments in Central and Southeast Asia and elsewhere in Africa.

The recent state of emergency declared by the government in Zambia highlights the value of the Scaling Solar program’s risk mitigation offerings in keeping these projects bankable. Neither of the projects in Zambia have reached financial close yet, despite an IFC deadline six months after projects were awarded in June 2016. While the program is off to a strong start, the jury is still out on its long-term success and replicability, as well as intended and unintended market impacts on the local industry.

Future rounds of the program will also benefit from lessons learned, including adjusting the timeline of the program to be more generous in lead times for engaged governments, more concrete requirements around land ownership and land-related environmental and social issues, and more customized prequalification criteria to prevent some private-equity-backed bidders from being structurally precluded from participating.

Scaling Solar’s transparent and standardized auction approach has demonstrated its ability to attract vertically-integrated global developers to frontier markets by targeting the correct barriers to utility-scale solar project development in these high-risk markets.

Despite out-competing nascent local pipelines in the short term, these IFC-backed procurements could prove to be a major market driver for unlocking gigawatts of capacity in new markets for years to come.


This new report from GTM Research on the World Bank Group’s Scaling Solar Program explores the program offerings, engagement process, achievements to date, opportunities for developers, and future potential. For more insight, contact

from GTM Solar

Suniva, SolarWorld Make Their Case for Import Relief: ‘We’re Not Out to Kill the Industry’

Federal trade officials asked representatives for Suniva and SolarWorld to justify their request for tariffs on imported solar equipment on Tuesday, marking the latest step in a case that threatens to upend the U.S. solar industry.

The 10-hour hearing at the International Trade Commission (ITC) in Washington, D.C., drew dozens of solar industry leaders, foreign diplomats and activists sporting t-shirts that read, "Save America's Solar Jobs, No New Solar Tariffs." 

Executives for the troubled solar manufacturers told the agency’s four commissioners that tariffs and price minimums are needed to revive their industry, which has been crushed by cheap imports from Asia.

“Quite simply, we need the Commission’s help to save solar manufacturing in the United States,” said SolarWorld CEO Juergen Stein.

The companies are calling for duties of 40 cents per watt on imported cells and a floor price of 78 cents per watt on modules. If the commission approves the request, it could destroy 88,000 jobs in installation, sales and construction, according to estimates by the Solar Energy Industries Association (SEIA).

“What would you recommend might help the broader solar industry?” asked Commissioner Meredith Broadbent.

“We’re not out to kill the industry,” said Matt Card, Suniva’s VP of Commercial Operations. “We are very open to a solution that works for all parties.”

As the ITC hearing took place in Washington, President Trump held a press conference in New York City to discuss his $1 trillion infrastructure plan. “We want products made in the country," he said at the presser. “I want manufacturing to be back into the United States so that American workers can benefit.”

Solar trade case watchers will be paying close attention to Trump's comments on jobs and the broader economy, as the final decision on whether to provide import relief, and the amount of relief, could end up being his.

Lawmakers say tariffs will cause their states to suffer

Suniva and SolarWorld have refuted the SEIA’s job predictions, pointing to an economic analysis by the law firm Mayer Brown that found new tariffs on solar products would result in a net increase of at least 114,800 jobs across all segments of the U.S. solar industry.

“There’s no way that math works,” said Tom Werner, the CEO of California-based SunPower, during a break in the hearing. “It’s ridiculous.”

Werner was among half a dozen solar company executives who testified that Suniva and SolarWorld brought their recent financial collapses upon themselves. Presidents and CEOs took turns describing their dealings with the two companies, recounting late deliveries, subpar panel efficiency and recalls on faulty panels.

“Not only are these arguments factually false. They are offensive,” said Suniva’s lawyer, Matthew McConkey, of the allegations. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities.”

More than 25 witnesses testified against the proposed tariffs, including state lawmakers from Minnesota, North Carolina and Maryland. 

“Minnesotans benefit enormously from the solar trade with Canada,” said Sen. David Tomassoni, noting an Ontario-based solar producer, Heliene Inc., that employs workers in the state’s Iron Range.

“Operations like Heliene’s … will no longer have access to vital components, and Minnesotans will suffer the consequences,” he said.

North Carolina Rep. Jason Saine said solar growth played a key role in helping his state attract $9 billion in investment over the past 10 years, which has especially benefitted poorer counties.

A bipartisan group of 16 senators and 53 members of the House of Representatives sent open letters to Commission Chairman Rhonda Schmidtlein urging the commission to reject the petition. “We respectfully request that the Commission carefully consider the potential negative impact that the high tariffs and minimum prices requested would have on the tens of thousands of solar workers in our states and on the hundreds of companies that employ them,” the letters state.

Several conservative free-market groups have also joined with SEIA to fight against protectionist trade measures.

Petitioners say previous trade cases didn't do enough

Representatives from the Embassy of Canada and the Embassy of Mexico testified against the petition, saying the two countries should be excluded from duties because they don’t supply a significant percentage of solar imports. 

Georgia-based Suniva filed the original petition under Section 201 of the 1974 Trade Act, which is an obscure part of U.S. trade law that could allow the president to implement tariffs, minimum prices or quotas on solar products from anywhere in the world if the ITC finds "serious injury." SolarWorld, a German company with U.S. manufacturing operations in Oregon, joined the petition in May.

“What inspired Suniva and then SolarWorld to revive the use of the dormant Section 201 global safeguard law?” asked Vice Chairman David S. Johanson, noting it had not been used in a case since 2001.

SolarWorld lawyer Timothy Brightbill responded that anti-dumping laws implemented against China and Taiwan in 2015 had failed to address the industry’s downturn, and Chinese producers were “openly boasting” about how easy it was to set up solar manufacturing operations in other countries to circumvent the duty orders.

Todd Baylson, 41, who traveled from Philadelphia to attend the hearing, says the petition has “introduced uncertainty” at Solar States, an installation company where he works in business development.

“We have a really big project that we’re involved in, and it’s tied to a PPA (power purchase agreement) price,” said Baylson. “If panel prices double … it’s a problem.”

The ITC is expected to issue a decision in September. If trade officials decide that imports have caused "serious injury" to domestic solar manufacturers, they will recommend remedies to President Trump, a man who has talked extensively about protecting U.S. manufacturing jobs. The final decision to accept, change or reject the ITC’s recommendation will be up to him.

from GTM Solar

Tuesday, August 15, 2017

The Messy Politics Surrounding the Solar Trade Case

As the U.S. International Trade Commission holds its first public hearing on the Suniva and SolarWorld trade case today, many solar stakeholders are already thinking ahead to the fall -- and about President Trump.

To be sure, the ITC holds a lot of sway in this case. The commission is expected to complete its investigation of the Section 201 trade petition by September 22, and if the trade body determines foreign imports have caused no injury to the domestic solar industry, the case will be thrown out. However, there's a good chance the final determination rests out of the ITC’s hands.

The ITC’s prehearing report states that numerous U.S. producers of crystalline silicon photovoltaic (CSPV) products reported adverse impacts on their operations due to import competition. In one query, nine U.S. producers ranked imports as an extremely important cause of injury, and one firm ranked it as an important factor. 

During testimony today, Matthew McConKey, partner at law firm Mayer Brown representing Sunvia, insisted this case isn’t only about the two petitioners. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities,” he said.

If the ITC does find injury, the case will very quickly become political. The commission will hold a hearing to discuss a trade remedy on October 3. That recommendation will then go to President Trump, who has the authority to accept, reject, soften or toughen the ITC’s proposed sanctions.

It’s the Trump card that has some solar industry insiders concerned. The Solar Energy Industries Association (SEIA) is making the case that foreign-owned solar product manufacturers Suniva and SolarWorld brought their recent financial collapses upon themselves, while the broader U.S. solar industry continues to thrive. SEIA calculated that 88,000 U.S. jobs would be lost if the requested tariffs are approved.

The trade group has garnered support from a bipartisan group of 16 senators and 53 members of the House of Representatives, who sent open letters to PTC Chairman Rhonda Schmidtlein urging the commission to reject the petition. “Increasing costs will stop solar growth dead in its tracks, threatening tens of thousands of American workers in the solar industry and jeopardizing billions of dollars in investment in communities across the country,” the Senate letter states. Several conservative free market groups have also joined with SEIA to fight against protectionist trade measures.

Despite these efforts, some opponents of the case say they’re worried SEIA’s approach is flawed and that the trade group’s arguments will be ignored by a president who’s disconnected from Congress, from the traditional lobbying process and from the rest of the Republican Party.

Stockpiling and price spikes

Opponents of the trade petition were unwilling to publicly acknowledge that tariffs could be approved, due to the sensitivity of the pending case. But it’s safe to say there’s a strong sense of unease -- and companies are planning for it. Solar developers have been stockpiling solar panels in anticipation of a price hike. And prices are said to have already increased 20-30 percent, just on the threat of new tariffs.

"The Trump administration has given a very clear indication that [trade remedies are] are their preferred mechanism for protecting existing manufacturers and attracting investment into new U.S. manufacturing -- and we’re not the only ones,” said one solar industry expert, referencing the administration’s recent investigations into aluminum and steel under Section 232 of the Trade Expansion Act of 1962. “It’s not like this trade case is magically popping up because solar is in trouble; it’s because the administration gave a signal that this is something they would support.”

In a speech delivered last summer, then-candidate Donald Trump specifically said he would use “every lawful presidential power to remedy trade disputes, including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974, and Section 232 of the Trade Expansion Act of 1962.”

One source with ties to the investment community said that letters from lawmakers don’t mean much in this context, and that SEIA should be doing more. People close to Trump or from Wall Street need to be opposed the tariffs in order for the president to oppose them. 

Can traditional conservatives win over the White House?

SunPower CEO Tom Werner, a registered Republican, acknowledged the philosophical divide among conservative political leaders on trade, but felt confident the jobs numbers would compel the Trump administration to reject the trade remedies.

“Traditional conservatives, which are largely not in the White House, are free market driven,” Werner said. “I think the common thread between the White House protectionist comments and the traditional conservatives is the desire for American jobs.”

“That’s the irony of this case -- it’s trying to protect less than 1,000 jobs of the solar industry’s 260,000 jobs,” he added, referring to Suniva and SolarWorld’s current employee numbers. “We’re hopeful the intersection of these things will bring the White House together with traditional conservatives.”

Senator David Perdue of Georgia -- Suniva’s home state -- is considered a top Trump ally in Congress, and has come out against the Sunvia and SolarWorld’s requested trade protection, which is giving opponents hope. In addition, Georgia Public Service Commissioner Lauren “Bubba” McDonald was among the state officials who testified against the petition today. “The expansion of the solar market benefits the entire U.S. solar industry, including producers of cells, modules, panels and installers, as well as many downstream industries,” he said. “But more importantly the growth in solar energy benefits electricity consumers.”

Debbie Dooley, president of Conservatives for Energy Freedom and founder of the Green Tea Coalition, said that she couldn’t see a successful businessman like Trump supporting the “bad business practices” that SolarWorld and Suniva were engaged in. She pointed to Florida-based PV manufacturer SolarTech Universal, as an example of a company that’s thriving despite market competition.

“I’m a big Trump supporter. I supported him from almost the beginning,” Dooley said. “[The trade case] is something I plan on fighting and I think a lot of conservatives will fight because it’s wrong and will be devastating … There will be many more jobs lost than jobs saved by giving these solar companies a bailout and adding the tariff these manufacturing companies are asking for.”

On the jobs front, opponents will have to counter employment numbers put forward by Suniva and SolarWorld. They’ll also have to get beyond Congress, to Trump’s inner circle of energy and trade advisors, whose professional backgrounds show they’re not big fans of imports and in favor of heavy remedies.

The Trump team of trade advisers

A closer look at President Trump’s advisers indicates that trade case opponents have their work cut out for them.

Robert Lighthizer, confirmed in May as Trump’s trade czar, failed to win the votes of GOP Senators John McCain of Arizona and Ben Sasse of Nebraska because they feared he does not understand the positive economic benefits of the North American Free Trade Agreement (NAFTA) and “would not negotiate trade deals that would protect the American consumer and expand economic growth,” according to a joint statement.

Lighthizer, who served as a deputy trade representative during the Reagan administration, wrote in a 2011 Washington Times piece that the "recent blind faith some Republicans have shown toward free trade actually represents more of an aberration than a hallmark of true American conservatism."

U.S. Commerce Secretary Wilbur Ross, who’s expected to play an outsized role in trade deliberations, has called China “protectionist” and called NAFTA “obsolete.”

NAFTA is relevant to the Section 201 trade case because Suniva and SolarWorld are urging the ITC to apply the tariffs broadly, including to America’s free trade partners such as Canada, Mexico and South Korea.

“As long as the remedy is comprehensive, we think it will be a significant positive for U.S. manufacturing and U.S. jobs,” said SolarWorld lawyer Timothy Brightbill. “The worst thing that could happen would be to omit or leave out certain countries from relief. That’s why Section 201 is so powerful, because it covers all countries and import sources.”

SunPower’s Werner, whose company manufacturers solar products in Mexico, said that the law states free trade partners are exempted from trade tariffs. But while it’s true that free trade agreements are designed to give certain countries preferential treatment, the Trump administration could seek to undermine those protections as a first step in rolling back NAFTA.

White House trade adviser Peter Navarro, a staunch NAFTA opponent with hardline views on the threat that China poses to the U.S., is another potential presidential influencer on this issue. In a related personnel matter, Nova Daly, who led Trump's trade office transition team, currently works as senior public policy adviser on international trade at law firm Wiley Rein, which is representing SolarWorld in the Section 201 case.

Department of Energy Chief of Staff Brian McCormack, who previously served as vice president of political and external affairs at the Edison Electric Institute, could be tapped to advise the president as an energy and technology expert on the trade case. During McCormack’s tenure, the utility trade group sought to help its members rollback favorable residential solar policies, and he is now overseeing a DOE study on how subsidies and tax policies for intermittent renewable energy resources are forcing the premature retirement of baseload energy resources. However, McCormack will also be aware of how higher solar prices could negatively impact utility procurement decisions. So it is unclear what, if any, position he will take on the trade case.

"Reject the government favoritism that plagues Washington"

Tori Whiting, research associate at the Heritage Foundation, acknowledged that the Trump administration’s protectionist position on steel and other industries would suggest a pro-tariff stance in the Section 201 case. But she underscored that the administration has not yet come out for or against this particular solar-related measure, and so it would be premature to reach that conclusion.  

The Heritage Foundation has not met with the administration on this issue, she added, but is waging a strong communications effort, along with allies in the newly-formed Energy Trade Action Coalition. The National Electrical Contractors Association, the National Retail Federation and the Electric Reliability Coordinating Council, whose members include Ameren, DTE Energy, Duke and Southern Company have also come out against the trade petition.

“The U.S. International Trade Commission will have the opportunity to reject the type of government favoritism that plagues Washington,” Whiting and her colleague Katie Tubb wrote in an article published today. “Acquiescing to Suniva and SolarWorld Americas’ petition for more tariffs would do deep damage to the rest of the U.S. solar industry and add yet another layer of federal subsidies to one of the most heavily subsidized energy technologies in America today.”

What happens next depends on what stakeholders hear about the trade investigation following today’s ITC hearing. The ITC has stated that the case is a very complicated, “so I think they’re seeing this is something that takes a lot of time to examine,” Whiting said.

Sources in the ITC hearing room in Washington D.C. today said it was very difficult to tell which way the commissioners are leaning.

from GTM Solar