U.S. trade panel set to recommend solar trade tariffs

(Reuters) - Federal trade officials on Tuesday will recommend measures to safeguard struggling domestic solar panel manufacturers against cheap imports in a closely watched case that could have a major impact on the price of U.S. solar power.

The vote by the U.S. International Trade Commission is a major milestone in a case that has divided the solar industry for the last six months. The panel’s proposals, which could include tariffs, a quota or other trade remedies, will be delivered to President Donald Trump, who will make a final decision later this year.

Trade remedies were requested earlier this year by two small U.S. manufacturers that say they are not able to compete with cheap panels made overseas, mainly in Asia.

But fears of steep new tariffs on imports have sparked widespread nervousness among solar developers and installers that have benefited from a 70 percent drop in the cost of solar since 2010. Many snapped up panels ahead of the ITC’s vote and warned that some projects may not be completed if the cost of panels rises too much.

The ITC made a preliminary finding on Sept. 22 that domestic solar manufacturers had been harmed by cheap imports after the complaint brought by bankrupt Georgia-based producer Suniva Inc in April.

Solar installation companies are hoping the commission will recommend a small tariff, or none at all.

“This tells you what’s going to land on the president’s desk, though there is a fair amount of unpredictability here given that the president has wide leeway and this president is pretty unpredictable in general,” said Shayle Kann, head of solar market research firm GTM Research.

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Suniva filed the rare Section 201 petition nine days after seeking Chapter 11 bankruptcy protection. In the petition, the company said a global glut of panels has depressed prices and made it difficult for American producers to compete.

Suniva’s petition is opposed by the Solar Energy Industries Association, the sector’s primary trade organization.

Suniva is majority owned by Hong Kong-based Shunfeng International Clean Energy. It was joined in the petition by another domestic manufacturer, the U.S. division of Germany’s SolarWorld.

In documents filed last month, Suniva asked for a tariff of 25 cents per watt on solar cells and 32 cents per watt on panels. It is also seeking a minimum price on panels of 74 cents a watt, nearly double their current cost. SolarWorld has asked for an import quota.

Reporting by Nichola Groom; Editing by Sue Horton and Dan Grebler