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US Solar Manufacturers Need Washington's Continued Support

October 22, 2020

Tariffs and eliminating loopholes have helped--let's keep up the pressure on China.

The United States is in the midst of a contentious election cycle. However, President Donald Trump and former Vice President Joe Biden have demonstrated agreement on some key issues. The Trump administration, for example, has shown that tariffs can bring back important manufacturing sectors, including steel. And the Biden campaign has pledged to reshore U.S. manufacturing.

[Michael Stumo | October 21, 2020 | Industry Week]

While President Trump is known for supporting oil and natural gas production, he’s also taken steps to reestablish America’s solar manufacturing sector. Along with Vice President Biden’s call for expanded solar panel production, this amounts to a shared belief that the United States can outmaneuver China in the future development of renewable energy systems.

Recently, President Trump acted to save U.S. solar manufacturing. Over the past decade, demand for solar panels in the United States has soared. However, even as U.S. solar installations have tripled, imports increased by roughly 500%.

Simply put, Beijing has massively funded its state-owned companies in order to produce a worldwide flood of solar panels. China now makes 60% of the world’s solar cells and 71% of all solar modules.

All of this happened rapidly, with prices for solar cells and modules falling by 60%. As a result, the U.S. solar industry almost disappeared, with 25 companies closing their doors between 2012 and 2017.

In 2018, the Trump administration imposed tariffs on solar imports. This has been a boon to America’s solar industry. There are now 18 companies actively manufacturing solar panels in the U.S., plus three new facilities under construction. Two of the world’s top 10 global solar manufacturers—First Solar Corporation and Q Cells—are now located in the U.S.

Investors have poured millions of dollars into America’s solar sector on the understanding that the federal government will protect them from China’s artificially underpriced imports. According to the Commerce Department, solar panels from China were being sold in the U.S. for “less than their fair market value” simply to put U.S. producers out of business. More recently, China started shipping two-sided solar panels to the U.S. in order to exploit a loophole in the tariffs.

Now, President Trump has eliminated this loophole—and China’s two-sided solar panels will again face tariffs. This is particularly helpful since Beijing has also ramped up subsidies for its solar manufacturers. Clearly China is still aiming to put America’s solar industry out of business. In response, President Trump has opted to preserve the current 18% solar tariff, even though it was set to drop to 15%.

The solar industry was originally invented in the U.S. It’s been tough to watch America lose such a critical, innovative industry. What President Trump has done is give breathing room to companies throughout middle America that support thousands of good-paying, skilled jobs. 

America cannot afford to lose its solar industry. China and other countries rightly see it as strategically important sector for manufacturing and innovation. Regardless of the current election season, Washington must agree on reclaiming America’s mantle as the world’s leader in high-tech manufacturing. 

Michael Stumo is CEO of the Coalition for a Prosperous America (CPA). 

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