Solar Power

Two Solar Companies Got Big Subsidies From Obama. Now They Want Protective Tariffs From Trump.

A bankrupt Chinese-owned taxpayer-subsidized company that's asking for protection against Chinese imports.


Joaquin Hernandez Xinhua News Agency/Newscom

Two bankrupt green energy companies may be given new lives, thanks to the economic protectionism in the guise of "America First."

Suniva and Solarworld, like many companies in the renewable energy industry, have received millions of taxpayer dollars in the form of grants and tax incentives over the past decade. Now, both are pinning their hopes on the Trump administration's likely move to levy heavy tariffs on foreign competitors.

Suniva received more than $20 million in tax credits before going bankrupt. SolarWorld was given over $100 million before filing for insolvency this April. But the subsidies weren't enough.

Suniva and SolarWorld recently filed a complaint with the U.S. International Trade Commission, a federal agency that investigates trade matters and handles complaints, with the aim of getting the ITC to recommend tariff duties on the cheap Chinese imports the two companies claim are hurting their bottom lines. The ITC went along with it, issuing a decision last week that said Chinese solar panels come at the expense of U.S. manufacturing jobs.

The two bankrupt companies have claimed cheap imports are harmful to America's domestic manufacturing market, something President Donald Trump declared on the campaign trail. "You take a look at China, what they have done. They have taken our money, our jobs, our base, our manufacturing." It's not hard to imagine the Trump administration seizing on the ITC ruling and imposing tariffs on Chinese solar panels in the name of protecting American manufacturing.

Which is exactly what Suniva and Solarworld want.

Needing protection from foreign competition is particularly odd in their cases because, while both companies are based in the United States, they're mostly foreign owned. SolarWorld is a branch of a German company, while Suniva is owned by Shunfeng International Clean Energy, a Chinese company, making Suniva a bankrupt Chinese-owned, taxpayer-subsidized company asking for protection from Chinese imports.

This isn't the first time these companies have turned to protectionism. As Reason's Christian Britschgi reported this past spring, SolarWorld had previously convinced the Obama administration to put a limited set of tariffs on solar imports from Chinese competitors in 2012, though then they had to at least claim that they were the victims of unfair practices. As The Wall Street Journal's editorial Board recently noted, they now only have to invoke manufacturing job loss as a reason for tariff duties.

Tax credits have been critical for the solar industry's success, particularly the federal tax credit passed in 2006. Between then and 2015, the solar industry in the United States grew at a compound rate of 76 percent, according to an industry analyst at IBISworld, a market research company. In 2016, Congress extended the tax credit to 2021, ensuring the incentive to buy solar power would continue. In 2016, 39 states had clean energy purchase requirements and 41 had net metering programs for customers to sell green energy to utilities, guaranteeing the market for solar power.

But even as solar installation jobs were booming on the back of government assistance, domestic solar panel manufactuers continued to struggle. With cheap foreign imports available, the solar industry no longer manufactures their parts in America.

Solar companies not as heavily involved in manufacturing side of the industry believe future trade restrictions will have a much wider effect than previous tariffs, based mostly on anti-dumping laws. The Solar Energy Industries Association claims it could cost as many as 88,000 jobs. The last time Section 201 was used was 2002, when the Bush administration levied tariffs on foreign steel, a decision that ultimately cost an estimated 200,000 jobs.

This might still not dissuade Trump. Given his rhetoric against China, his belief in tariffs, and the door opened by the International Trade Commission, Trump could slap the levies on solar components by early next year.

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  1. Cost-effective solar power is like nuclear fusion power. It’s always just 30 years away.

    1. Cost effective solar is here now. Onshore wind is still the cheapest generation source in most places and depending on location and conditions, unsubsidized solar PV is often the next cheapest, then natural gas is the third cheapest generation source.

      The US is an exception for now because we’re enjoying very cheap ng thanks to the fracking boom. However, once LNG export capabilities expand enough to catch up with supply, US ng prices will climb and solar will be the second cheapest source here too, at just a tad higher than onshore wind.

      Cost data from investment banking firm Lazard’s LCOE Analysis:

      1. But solar panels are dirty and wasteful to make, and have lifespans of like 2 decades at most. Traditional nuclear fission is and always has been the most environmentally friendly and efficient source of CO2 free energy. Even when things go bad, it only really hurts people. The environment doesn’t give a shit and will rehabilitate radioactive areas within a few years. There are coral reefs in the craters of the Bikini Atoll where we dropped 25 nuclear bombs. Chernobyl is basically a wildlife preserve. Nature’s already taking Fukushima over (nobody has died from Fukushima radiation, btw).
        Animals and plants mostly don’t give a shit about low levels of radiation.

      2. Cost effective solar is here now. Onshore wind is still the cheapest generation source in most places

        Which explains why Germany’s electrical prices are triple the US.

        Go on, pull the other one.

        1. Germany took one for the team by jumping in long before the technology was competitive. Their hasty pivot away from nuclear has also hurt on the cost side.

          But a lot has changed in just the last few years. Between 2010 and 2017, the installed cost of utility scale PV has fallen from $4.57 per watt to $1.03. Solar Panel prices have basically been on the same trajectory as flat panel TVs.

          1. Link to an NREL report on solar PV’s price drop:

          2. The study, like me, is a lot to swallow. But I’m not clear if the costs include the storage systems that must accompany wind and solar. There also seemed to be a lot to say about assumptions of location– such as the desert southwest etc, regarding amount of usable sunlight etc.

            I’m not saying that costs aren’t dropping, but I’m curious if this study really got it right. There are, in my opinion, externalities in regards to Solar that don’t exist with gas (price-wise) because the price of the externalities with gas is built in to what you pay at the pump.

            I can buy solar panels, but they have to be installed, maintained, and I’ll need a storage system that has to be installed, maintained, with consumable elements in regards to batteries. Plus what works one geographic location won’t be as efficient or workable in another, and that can also change from house to house, let alone city to city or state to state.

            1. For sure, solar and wind aren’t as flexible as natural gas. But when coal was the cheapest energy source, no one said “sure coal is cheap, but it isn’t flexible and can’t handle demand ebbs and flows and once you factor in the cost of supporting natural gas plants and peaking jet turbines, it’s not so cheap.”

              The way competitive markets work, grid operators will always schedule the cheapest generation source for each time interval. When the sun is shining or the wind is blowing, they’ll get scheduled first because their marginal cost is nearly zero. If neither are available ng will get scheduled.

              Unlike coal and nuclear, ng plants are cheap to build, ramp fast, and don’t require long run times to be economical. This is why coal and nuclear are all but dead. They’re expensive to build, need high utilization rates to get close to being competitive, and have minimum runtimes of days or weeks. They’re the exact opposite of what you want to run a grid on. When they were the cheapest, grid operators bent over backwards to accommodate them. Now, solar and wind are cheaper so grid operators are accommodating them instead.

            2. Just to clarify, I was talking about utility scale solar being competitive with natural gas. Residential solar is a lot more expensive because you don’t get the economies of scale and also it has the issues you mention about location, roof angles, etc.

      3. I tried cutting and pasting some segments of your study but the PDF didn’t seem to allow copying and I didn’t have time to explore a workaround. If you read the fine print, one smells a whole lot of ‘if’ coming off of that study.

        1. The annual Lazard analysis is sort of the gold standard on this information. They’re not political and aren’t part of the “green” movement trying to hype renewables. Their research gets used by investment bankers making financing decisions on energy projects.

      4. Cost effective solar is here now.

        No it isn’t.

        Onshore wind is still the cheapest generation source in most places and depending on location and conditions …

        No it isn’t.

        Learn how the grid works. Learn how both those sources are unable to provide dispatchable power, supply synchronous power, VAR’s, tolerate line faults or participate in a black start. Learn why due the intermittent nature of those sources the reserve (hidden costs of solar and wind) generating capacity (fossil fuel generators) has to increase significantly.

        1. In competitive power markets, things like capacity and ancillary services can and should be priced separately. Usually, even after these costs are accounted for, solar and wind are still competitive. Again, as I said above, when coal had the cheapest marginal cost of all generation sources, no one yet, “sure, but coal can’t ramp fast enough to follow load, so it’s no good.” Grid designers dealt with the inherent inflexibility of coal because it was so cheap. Now the tables have turned and it’s wind and solar that are the cheapest sources.

          That means the outdated 20th century concepts of baseload and dispatchability are not important or desirable in a modern grid. Generation sources with a higher marginal cost than wind and solar, must provide FLEXIBILITY and RELIABILITY to be competitive. This means they need to offer the trifecta of high availability, fast ramp time, and low minimum economic runtime.

          Coal and nuclear can’t compete on these terms and that’s why natural gas is taking over as the best non-renewable complement to solar and wind.

          The main uncertainty now is what the role of storage will be. That’s dependent on how fast the technology mature and costs decline and I’m not making any predictions. I will note that storage is economic now in limited cases like Island and micro grids, so a future with lots of storage complementing wind and solar doesn’t seem impossibly unrealistic.

          1. … things like capacity and ancillary services can and should be priced separately.

            So what you’re sayin is the extra hidden costs born by the traditional generators due to the intermittant sources shouldn’t be included in the costs of wind and solar. That the traditional generators should eat the cost that should be attributed to the intermittant sources. That is the type of thinking that got Spain, Germany, South Australia, and Ontario Canada in such a bind. It’s economic stupidity.

            Before you come back with more nonsense on technology from you’re response above:

            Germany took one for the team by jumping in long before the technology was competitive.

            The technology does nothing for the fundamental problem that wind and solar create large transient changes in supply. You are attempting to hand wave away the fundamental problem with non-dispatchable power.

            …but coal can’t ramp fast enough to follow load …

            It isn’t the load that is the problem. The demand is fairly predictable and changes rather slowly compared the transients produced by wind and solar due to their fundamental nature. The problem is the traditional generators have to ramp up and down at a faster rate to accommodate the intermittent sources. This has a profound effect on generator maintenance cost as well as the fact the traditional generators are loosing income to accommodate the intermittent generators.

            1. Natural gas generators are making good money doing exactly what you say can’t be done.
              They ramp up fast when needed then go offline and sit idle when not needed. In exchange for providing this flexibility to grid operators, they fetch a premium when they run, as they should.

              Running a mixture of solar, wind, and natural gas provides a reliable grid for far less cost than coal or nuclear. That’s the reality and you can deny it all you want, but the world has already moved on.

              Coal and nuclear can’t even cover their operating costs in today’s market, let alone pay off their capital costs. Meanwhile, solar, wind, and natural gas generators are making good money.

              The only question remaining on the coal and nuke front is how much ratepayer money is going to get poured into propping up the dinosaurs as they fade off into the sunset.

            2. “That the traditional generators should eat the cost that should be attributed to the intermittant sources.”

              That’s not what I’m saying. Competitive market rate design already provides compensation for these things by setting up additional revenue streams only for the generators that can provide these things (eg nat gas, coal, nukes, peakers, etc)

              This is how things work today in most competitive markets in the US. Grid operators determine the amount of capacity they need to ensure a reliable grid. Then they ask generators to ‘bid’ on providing this capacity. To enter a bid, the generator must promise to be available when needed, so solar and wind usually can’t bid into capacity auctions. The lowest bidders that get accepted to provide guaranteed capacity to the grid are then paid a stipend in addition to any power sales that they make.

              In some competitive markets, rate design also offers payments for providing what are called ancillary services (most of the things you mentioned). Again, these revenue streams are already available to fossil fuel generators and even after factoring all this in, solar and wind are often still the cheapest.

            3. “The technology does nothing for the fundamental problem that wind and solar create large transient changes in supply. ”

              German technology completely changed the game with intermittent renewal integration.

              Before Germany blazed the trail with this, most thought integrating more than 15% of total generation from intermittent wind and solar would be impossible. German ingenuity and engineering proved them wrong.

              The key was building advanced weather prediction models and incorporating them into grid scheduling software. The Germans got their models to the point where they could accurately predict wind and solar production in 15 minute intervals as much as 24 hours ahead of time.

              It turned out that wind and solar production is intermittent, but it’s actually highly predictable.
              This was game changing and now the technology is in use all over the world.

          2. Further, you failed to address the inability to provide dispatchable power, supply synchronous power, VAR’s, tolerate line faults or participate in a black start. IOW, you sound like a paid hack.

            1. See above comment about the revenue streams offered for ancillary services in many competitive power markets.

              I’m not perfect and certainly can get things wrong from time to time, but I promise I’m not a paid hack. I wouldn’t even call myself a green. Just a mostly retired engineer who’s interested in this stuff and offering some hopefully reliable information so people can develop informed opinions.

  2. So, Trump is saving America’s Green Energy Economy. He’s making Green Energy Great Again. That’s going to cause some heads to explode.

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