Photo: used with permission from publicsource.org

The Future of Solar is in the President’s Hands. It *Should* Be an Easy Call

, senior energy analyst, Clean Energy | December 8, 2017, 11:49 am EDT
Bookmark and Share

The saga of the would-be solar tariffs that just about nobody wants is continuing, and I can’t help but be struck by the disconnect between some of the possible outcomes and the administration’s purported interest in rational energy development for America. If President Trump believes what he says, deciding not to impose major tariffs shouldn’t be a tough decision.

Here’s the thing: in March 2017, the president issued an executive order about “undue burdens on energy development,” which said (emphasis added) that it was:

Solar’s future: Progress or pain? It’s his call.

…in the national interest to promote clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.

Encumbering, constraining, preventing. Remember those verbs as we go through some of the key facts of this case.

The players

The trade case, brought by two US solar panel manufacturers that are on the rocks, or whose foreign parents are, involves a little-used (and failure-prone) provision in the US tax code. And it has met with almost universal rejection, from a whole host of industry, political, security, and conservative and really conservative voices (Sean Hannity, anyone?).

Even the US International Trade Commission (USITC) tasked with making recommendations in response to the petition couldn’t agree, with the four commissioners coming up with three different proposals.

As we said at the time, on the one hand it was good that the USITC recommendations weren’t as drastic as what the petitioners had asked for. On the other hand, anything that slows down our solar progress is bad news for America.

The (pre-Trump) progress

Solar has been on an incredible trajectory for years now, producing energy, cutting pollution, increasing energy security, and helping homes and businesses. The first nine months of 2017, for example, saw solar producing 47% more electricity than in the same period of 2016, with the biggest gains among the top 10 states for solar generation being in Georgia, Texas, and Utah.

Solar has also been an incredible job-creating machine. Some 260,000 people worked in the solar industry by the end of 2016, almost 2.5 times 2011’s solar job count. One in every 50 new American jobs last year was created by the solar industry. And those have been in different pieces of the industry—R&D, manufacturing, sales, project development, finance, installation—and all across the country.

The problem and presaging

Credit: J. Rogers

Some of those gains have taken place during the Trump presidency, and maybe he can rationalize taking credit for them by pointing out the fact that he at least didn’t stop those good things from happening.

That benign neglect may be about to change, though, and we’re already seeing the effects of the uncertainty that the president’s rhetoric around issues of solar and trade has created.

The trade case has continued. While not part of the specified process for this type of proceeding, the White House invited the public to submit comments to the US trade representative, and recently held a public hearing.

The next deadline is January 26, the end of the period for President Trump to make up his mind about the USITC recommendations—accepting one of the sets of proposals, doing something else, or rejecting the idea of tariffs and quotas.

In the meantime, the effects are already hitting: Utility-scale solar costs had dropped below $1 per watt for the first time in history earlier this year. Now those costs have climbed back above that mark as developers have scrambled to get their hands on modules ahead of whatever’s coming.

Large-scale solar projects are faltering (as in Texas) because of the inability of developers and customers to absorb the risk of substantially higher solar costs. That’s investment in projects on American soil, on hold.

But those setbacks could be just a taste of what’s to come.

The point: Encumbering, constraining, preventing

That brings us back to the March executive order, which boldly professed an intention to do away with burdens holding back US industry, and was decided anti-interventionist (in the regulatory sense).

And yet here we are, a few short months later, talking about doing that exact thing—messing with the market, and going against our national interests. Encumbering energy production by driving up the costs of the cells and modules that have powered so much growth. Constraining economic growth by making it harder for American homes and businesses and utilities to say yes to solar. Preventing job creation—even causing job losses—by shrinking the market for what our nation’s vibrant solar industry has been offering so successfully.

Credit: J. Rogers

The pain

While provisions in the tax bill being worked out in congress would do no good for renewables, the president’s actions could have much more direct impacts on American pricing and competitiveness. A lot of smart people are pointing out that any bump-up in US solar module manufacturing jobs will be way more than offset by job losses elsewhere in the industry, including elsewhere in solar manufacturing.

If the president chooses to ignore the many voices clamoring for rational policy on this, if he chooses—and remember he alone can fix this—to impose major tariffs or quotas, he’s going to own their impacts.

Every net American job lost because of higher module prices will have his name on it.

Every US solar panel manufacturer that doesn’t magically take off behind his wall of protectionism will be evidence of the misguideness of his approach.

Every small or large US solar project cancelled—jobs, investments, and all—because of the speedbumps, roadblocks, and hairpin turns on his energy vision-to-nowhere will be a Trump-branded monument to his lack of foresight and unwillingness to accept the changing realities of energy, innovation, and ingenuity.

The path

The solar industry, though, has offered President Trump a way out. They’ve proposed an import licensing fee approach that would support expanded US manufacturing while letting solar continue to soar (all else being equal).

That’s fortunate for the president, and for just about all of the rest of us. Because if he’s truly about unencumbering energy production, about removing constraints to economic growth, and stopping the prevention of job creation, killing American solar jobs would be a funny way to show it.

Public Source

Posted in: Energy Tags: ,

Support from UCS members make work like this possible. Will you join us? Help UCS advance independent science for a healthy environment and a safer world.

Show Comments


Comment Policy

UCS welcomes comments that foster civil conversation and debate. To help maintain a healthy, respectful discussion, please focus comments on the issues, topics, and facts at hand, and refrain from personal attacks. Posts that are commercial, self-promotional, obscene, rude, or disruptive will be removed.

Please note that comments are open for two weeks following each blog post. UCS respects your privacy and will not display, lend, or sell your email address for any reason.