German Jamison: ITC Issues Recommendations in Section 201 Solar Trade Case

The U.S. International Trade Commission released a set of recommendations on the Section 201 solar trade case Tuesday that will soon make their way to President Trump for final consideration.

Commissioners Irving Williamson and David Johanson aligned on the proposal to place a 30 percent ad valorem tariff on imported crystalline silicon PV (CSPV) modules, to decline 5 percentage points per year over four years.

For imported solar cells, the two commissioners agreed on four-year "tariff-rate quota" that would allow for up to 1 gigawatt of tariff-free cell imports. Any imports over 1 gigwatt would be subject to a 30 percent tariff. Each subsequent year, the tariff rate would decrease by 5 percentage points and the in-quota amount would increase by 0.2 gigawatts.

Chairman Rhonda Schmidtlein structured her proposal similarly, but with more stringent rates. For imported CSPV modules, she proposed the president implement a 35 percent tariff, rather than 30 percent. Like Williamson and Johanson, she recommended reducing the tariff incrementally over a four-year period, by just 1 percentage point per year.

With respect to imported CSPV cells, Schmidtlein recommended a tariff-rate quota of 0.5 gigawatts, and that imports within quota be subject to a 10 percent tariff. Beyond the 0.5 gigawatt threshold, the 10 percent tariff would increase to 30 percent.

Schmidtlein recommended the tariff-rate quota on cells be implemented for four years, and that the in-quota level be incrementally raised and the tariff rate incrementally reduced over the course of the remedy period.

The third proposal from Commissioner Meredith Broadbent was the least severe. She propsed a 8.9 gigawatt quota on CSPV module and cell imports, to increase 1.4 gigawatts each year over four years.

"These recommended quantities are consistent with the marketshare held by imports in 2016, adjusted to reflect projected changes in demand for photovoltaic products over the next four years," she wrote. "Therefore, they are set at levels that will not disrupt expected growth in CSPV demand but will help address the serious injury to the domestic industry by preventing further surges in imports."

Broadbent noted that a major market disruption would adversely affect hundreds of thousands of U.S. solar workers. "I am firmly of the view that damaging the domestic consumers, installers, and manufacturers supporting CSPV deployment is not an effective way to save domestic producers of CSPV products," she added.

Broadbent also proposed that the president administer the quota by selling import licenses at public auction at a minimum price of one cent per watt. In other words, the importer of record would have to pay a penny per watt in order to come in under the 8.9 gigawatt restriction.

The sale of import licenses will likely generate the U.S. government revenue of at least $89 million in the first year, to increase by at least $14 million each year thereafter. Broadbent recommended those funds be used to provide development assistance to domestic CSPV product manufacturers for the duration of the remedy period.

U.S.-based manufacturers Suniva and SolarWorld brought the Section 201 case earlier this year.

"We are pleased that a bipartisan majority of the Commission has recommended tariffs, tariff-rate quotas and funding for the domestic industry. This is a useful first step," said Juergen Stein, CEO and president of SoalrWorls Americas. "The process will now move forward to the President, and we continue to believe that the remedies SolarWorld has recommended are the right ones for this industry at this time."

This is a developing story. Additional information will be posted shortly.