After the U.S. International Trade Commission's (ITC) ruling on September 22 that importers of solar panels have seriously injured domestic solar panel manufacturers, the U.S. solar industry is set for a period of uncertainty. President Trump has until January to decide whether to implement the as-yet unknown ITC recommendations. Those recommendations will likely include tariffs on solar photovoltaic (PV) panels imported to the U.S. and until it is clear how any tariffs will affect panel prices, solar developers and installers will be hard pressed to accurately plan projects.

Suniva, a bankrupt solar cell manufacturer based in Georgia, filed the ITC petition earlier this year with support from SolarWorld Americas, the U.S. subsidiary of an insolvent German solar cell manufacturer. They are seeking a $0.40 per watt tariff and a floor price of $0.78 per watt for any imported PV cells, whether sold separately or in panels.

The solar industry had generally expected the ITC’s unanimous decision, leading some developers to hoard supplies and slow or stop construction, since they anticipated higher prices on certain imported components. Domestic solar panel manufacturers, many of whom conduct significant portions of their production overseas, also expect to see a chilling effect if tariffs are implemented.

The ITC finding under section 201 of the Trade Act of 1974 that increased imports seriously injured the domestic solar panel industry means it will recommend relief to the President, but he will make the final decision on whether or not to provide any relief and the amount of relief. The ITC will hold a public hearing on October 3 in Washington, D.C. to consider possible remedies before making its recommendation to the President by November 13.

Interestingly, the ITC decision found that imports of PV cells from Australia, Colombia, Jordan, Peru, Panama, Singapore, Canada, and participants in the U.S.-Dominican Republic-Central America Free Trade Agreement (Honduras, Nicaragua, the Dominican Republic, Guatemala, El Salvador and Costa Rica) are not a substantial cause of serious injury, in contrast to imports from Mexico and South Korea. The countries found not to have been a substantial cause of the injury do not have significant solar cell manufacturing, but could theoretically draw investment in those areas if set aside as free trade zones.

Most of the U.S. solar industry is opposed to the tariffs sought by Suniva and SolarWorld Americas, leading dozens of industry executives and government officials to speak out against the petition at an ITC hearing last month. Some in the industry have focused on the impact these tariffs would have on the Trump administration’s “America First Energy Plan,” noting that economic analysts predict major reductions in solar jobs and solar installations across the country if tariffs are implemented. A reduction in the amount of domestic energy produced by solar facilities, not to mention the corresponding jobs, would seem to be inconsistent with the Trump administration’s energy goals. That Suniva is mostly owned by a Chinese company, and that SolarWorld has been put up for sale by the administrator of its insolvent German parent, have not gone unnoticed. Some opposed to the proposed tariffs see this as equivalent to foreign meddling in domestic energy policy.

Most of the companies, industry groups and states, including governors from Nevada, North Carolina, Massachusetts and Colorado, have focused on the potential job losses, however, citing estimates that 88,000 jobs in solar installation, sales and construction could disappear. The impact on the solar industry could be significant especially in states without renewable energy mandates given that low solar panel prices have been a driving force behind utility-scale projects – without a state renewable energy requirement those projects may no longer be economically feasible.

The uncertainty in the solar industry stems not only from the fact the ITC has broad discretion to recommend any kind of relief, but also from the unpredictability of President Trump’s response. It appears that a recommendation of tariffs would force the Trump administration to choose between two of its main values – blue collar jobs on the one hand, and protectionist economics on the other. In the meantime, the solar industry will have to start planning for a possible future with significantly more expensive solar panels.