Sunday, May 27, 2018
Editorials

Editorial: Don't limit competition in solar energy market

Consumers, the environment and global security all benefit from competition in the solar energy market. But a case before federal trade commissioners could crimp the solar market, worsen America's trade and security ties, drive up costs and drive down innovation in the clean-energy sector. It also could cost tens of thousands of U.S. jobs. The U.S. International Trade Commission should put fair competition and the broader interests of consumers ahead of the grievances of two domestic solar manufacturers.

Suniva, a Georgia-based firm that originated the complaint, and SolarWorld Americas are seeking broad relief from the U.S. government for what they claim is a flood of global imports of solar cells and panels that is causing the "near destruction" of the U.S. industry. Despite anti-dumping measures against China and Taiwan, the petition maintains, China and others are still overproducing solar components and avoiding penalties by moving operations to third countries such as India, Vietnam and Malaysia, thereby sapping the price for American-made products.

The commission is treating much of the documentation in support of the petitioner's case as proprietary. But Suniva said the amount and value of imports rose more than 50 percent between 2012 and 2016. And last year, domestic production of solar panels fell 11 percent while production of solar cells fell 38 percent. The petition seeks a tariff on solar cells and a floor price for solar modules for four years. It also requests other measures, including new negotiations by the U.S. government to address the global glut in supply and the "proper functioning" of the solar markets.

Tariffs and price guarantees are, on their face, inconsistent with the "proper functioning" of competitive markets. There are many subsets of the economy where U.S. manufacturers are not competitive globally for all sorts of reasons, many of them self-inflicted. Opponents say the petitioners have only themselves to blame for failing to adapt more successfully to an evolving market, and they warn that any tariff or price guarantees would damage the solar industry more broadly by increasing the price for solar and softening demand. The Solar Energy Industries Association, which opposes the petition, said the tariffs could double the price of solar panels in the U.S. and cost 88,000 jobs in the industry, including 3,700 in Florida, as the panels become more expensive to distribute and install.

The commission, which heard the case last week, is expected to rule on the matter later this year. Any recommendation for penalties would be decided by President Donald Trump, whose hard line on trade and China would seem to promise a sympathetic ear. But this finding must be based on merit and not politics. Lower prices for solar parts have helped invigorate an emerging industry that promises cleaner air and energy, jobs and technological innovation. As the Sunshine State, Florida stands particularly to gain from lower consumer energy costs, greater entrepreneurial investment and the diversification of the energy grid. The commission needs to see the distinction between fair trade and protectionism and be willing to focus on the broad public interest in opening the solar market.

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