US takes step to further limit Chinese solar imports

The United States took a step on Friday toward potentially extending import duties on Chinese solar energy products to also cover panels made with parts from Taiwan in a case that could have a major impact on the fast-growing U.S. solar market.

The U.S. International Trade Commission found there was reason to think the imports could harm the local solar industry, putting Washington on a path toward widening the reach of the steep duties it slapped on products from China in 2012 and potentially escalating a back and forth trade spat.

The U.S. arm of German solar manufacturer SolarWorld AG had complained that Chinese manufacturers are sidestepping the fees by shifting production of the cells used to make their panels to Taiwan and continuing to flood the U.S. market with cheap products.

"Step by step, U.S. solar producers are returning to a day when they no longer are forced to compete with the government of China," said Mukesh Dulani, president of SolarWorld Industries America, which makes crystalline silicon solar panels at a factory in Hillsboro, Ore.

SolarWorld said it had the support of other solar manufacturers operating in the U.S. in pushing for a broadening of the duties.

But the Coalition for Affordable Solar Energy (CASE), which represents about 50 U.S. solar companies that mainly focus on installation, said installers would suffer if there was another jump in the cost of modules. CASE said those prices had already gone up 10 percent since the complaint was filed on Dec. 31.

"By raising the cost of solar for American homeowners, SolarWorld is poised to inflict critical damage on an industry which last year added more than 20,000 solar installation, sales, and distribution jobs to the U.S. economy," CASE President Jigar Shah said in a statement.

Lawyer Richard Weiner, a partner at Sidley Austin who is representing the Chinese solar industry, said SolarWorld was trying to shut competition out of the U.S. market but did not have the capacity itself to supply all the goods needed.

"We remain convinced that fairly traded imported solar products from China and Taiwan are vital for America to continue its shift away from fossil fuels," he said.

The ITC's preliminary decision means the U.S. Department of Commerce will continue with its investigation into whether the products are being sold in the U.S. below their fair value, or if their manufacturers receive inappropriate levels of subsidies. It could eventually suggest import duties.

China's solar manufacturers have taken over the global solar market by offering cheaper modules than their peers, but the surplus of solar equipment has led to a pricing slump over the past four years, throwing many companies into crisis.

U.S. solar installations were worth more than $13 billion in 2013, according to research firm GTM. About half the solar equipment installed in the United States last year was made in China. In the fast-growing rooftop solar market, that figure was 71 percent.

Friday’s development comes a day after the largest solar plant of its kind in the world began providing energy to customers in California.

The Ivanpah Solar Electric Generating System, sprawling across roughly 5 square miles of federal land near the California-Nevada border, opened Tafter years of regulatory and legal tangles.

"The Ivanpah project is a shining example of how America is becoming a world leader in solar energy," U.S. Energy Secretary Ernest Moniz said in a statement after attending a dedication ceremony at the site. "This project shows that building a clean-energy economy creates jobs, curbs greenhouse gas emissions and fosters American innovation."

While solar power accounts for less than one percent of the nation's power output, thousands of projects from large, utility-scale plants to small production sites are under construction or being planned, particularly across the sun-drenched Southwest.

Al Jazeera and Reuters