Washington — Although solar industry officials have praised the Jan. 15 trade deal between the United States and China, the trade war between the two nations’ solar industries continues and U.S. companies have been hurt the worst.
Since President Donald Trump placed tariffs on imported solar products two years ago, U.S. solar companies have lost 62,000 jobs and $19 billion in investment, according to a recent report by the Solar Energy Industries Association.
As the National Solar Jobs Census released by the Solar Foundation shows, solar employment declined by nearly 8,000 jobs in the first year alone of President Trump’s solar tariffs.
Over the last 10 years, China has surpassed the United States in making two of the major parts of the solar industry – crystalline silicon photovoltaic cells and solar modules. China has also prioritized the production of polysilicon, the building block of solar manufacturing, as a means to dominating the entire solar product industry.
China has long subsidized its solar-panel industry, while it now controls 95% of the global ingot and wafer export market. In response, the U.S. Commerce Department imposed import duties aimed at curbing Chinese imports in 2012, the first shot in the U.S.-China solar trade war.
In January 2018, Trump approved a 30% tariff on solar panel imports with a 5% drop in tariffs each year over the next four years. Over the next two years, the Trump administration also imposed tariffs between 10% and 25% on solar module imports from China.
Those new tariffs exacerbated the tensions between China and the United States as the U.S. solar industry continues to suffer. Meanwhile, China has approved tariffs on imported solar-grade polysilicon from the United States and South Korea.
“As a direct result of China’s targeted trade practices throughout the solar value chain, U.S. polysilicon capacity is under imminent threat,” said Stephen Orava, a counsel for U.S. polysilicon producers.
U.S. solar manufacturers have been hurt in the ongoing solar trade war, Orava said, including Hemlock Semiconductor, Wacker Polysilicon North America and REC Silicon.
China has been unable to supply enough polysilicon for its solar industry, which has forced it to rely on imported polysilicon. But trade barriers have made it virtually impossible for U.S. suppliers to satisfy that demand.
The loss of China as a U.S. export market has cut polysilicon production in the United States, cost more than 1400 high-wage jobs, shut down a $1.7 billion plant in Washington state and led to the abandonment of a $1.8 billion facility in Tennessee over the last eight years. This week, China imposed another five-year extension on import restrictions of solar-grade polysilicon from the United States.
That means Trump’s steps have not helped the “critical and most strategic first step in the solar value chain,” Orava said.
While U.S. polysilicon makers have lost access to China, they also have a disadvantage when it comes to supplying U.S. manufacturers of other solar products, such as ingots, wafers and modules. Most U.S. makers of solar panels and modules use imported polysilicon.
Trump’s solar tariffs were initially set to deal with the dumping of solar products from China into the United States, but they have also manufacturers and investors from other countries.
In some cases, however, that has translated into more U.S. jobs.
Ontario-based Heliene Inc. made its solar panels in Canada, but it moved some manufacturing to Minnesota after Trump’s tariffs hit imported Canadian solar materials. It is now the only solar panel maker in Minnesota and the first foreign-owned facility to expand in the United States to avoid Trump’s solar tariffs.
Since Heliene took over the factory in 2017 from Silicon Energy and retooled its Minnesota module factory, this company has invested $21 million and provided 90 jobs in northeastern Minnesota, where the economy had long been tied to iron mining.
“Solar manufacturing is of continued importance to our state,” said Rep. Pete Stauber, R-Minn.
Heliene had tried to expand into a vacated plant in Oregon but dropped its plan because of higher-than-expected costs.
Trump should drop the tariffs on solar modules imported from Canada, said Jonathan Stoel, a Heliene representative.
Meanwhile the debate over future solar tariffs continues. In December, representatives from Indonesia, Taiwan and Malaysia, where Chinese companies have moved to avoid tariffs, sought exemptions from the tariffs, although they wanted them increased for other countries.
Oregon-based Suniva, however, argued for the tariffs to remain, because removing them “would undercut the ability of the domestic crystalline silicon photovoltaic cell manufacturing industry,” said Matt Card, its chief operating officer.
Suniva filed for bankruptcy protection in 2017 before the start of the Trump tariffs. Its Georgia factory remains closed despite the start of the tariffs.
Other solar industry supporters want the tariffs removed. Rep. Paul Cook, a California Republican whose district includes multiple solar-power farms, called them “unwarranted from a legal perspective and ill-advised as a matter of public policy.”
Last July, Cook introduced the bipartisan Renewable Energy Extension Act to extend the 30% energy tax credit for solar investment. The law was first passed in 2005 and signed by Republican President George W. Bush.