The U.S. International Trade Commission has found injury to the domestic crystalline silicon solar cell industry based on a petition bought by bankrupt manufacturers Suniva and SolarWorld. 

The unanimous 4-0 vote in favor of the petitioners in the Section 201 case was held at ITC headquarters in Washington, D.C., soon after 11 am ET on Friday. A remedy hearing is slated for Oct. 3 and the deadline for relief recommendations is Nov. 13. The deadline for recommendations by President Donald Trump is Jan. 12 ( PFR, 9/14).

"The fact that the Suniva 201 trade case is now moving to the remedy phase has the potential to slow or stop solar projects in the works," write John MarcianoShana Hofstette and Greg Lavigne, attorneys at Akin Gump Strauss Hauer & Feld in Washington D.C., in an Industry Current (  PFR, 9/22).

The cost of solar panels has already soared this year as solar project developers have stockpiled modules, with manufacturers struggling to keep up with demand.

"If it goes through, it'll kill a ton of deals," a financial adviser focusing on solar projects told PFR last month, adding: "Even if it's a small increase [in the price of panels], there are a lot of marginal deals that would just not have value."

"A lot of people acquired solar projects but didn't lock in their panel prices, with the hope of these projects becoming economic," said a project finance banker.

FIGHTBACK

The deadline to submit briefs for the remedy hearing on Oct. 3 is Wednesday Sept. 27. The Solar Energy Industries Association plans to file a brief, the organization's president and ceo Abigail Ross Hopper told reporters on Friday afternoon, while declining to comment on what it would contain.

Ross Hopper noted that there are limited opportunities to appeal an ITC decision in court, making an appeal via judicial channels unlikely.

"The ITC’s decision is disappointing for nearly 9,000 U.S. solar companies and the 260,000 Americans they employ. Foreign-owned companies that brought business failures on themselves are attempting to exploit American trade laws to gain a bailout for their bad investments," she wrote in a statement issued moments after the vote.

Should the president move to implement the ITC’s recommendations, a foreign nation could appeal potential tariffs at the World Trade Organization.

SHOCKWAVES

The ruling could lead to the loss of 88,000 U.S. jobs and the deferral of 47 GW of solar installations in the next five years. according to  a Sept. 21 research note authored by Moody’s Investors Service  analysts Lesley Ritter, Tracy Rice, Swami Venkataraman and Jim Hempstead.

Trump could find implementation of the recommendations appealing, write the analysts, who note that a majority of U.S. panel imports are sources from China and Southeast Asia.

"[A]dopting a protectionist policy in support of the U.S. solar manufacturing industry makes for an attractive political decision that may be hard to pass on," they write.

Delayed investment in solar could lengthen the life of coal plants that would otherwise be retired, a desirable outcome for a president who has been an outspoken advocate for the industry, according to the Moody's analysts.

Ross Hopper disagrees, however, saying on Friday's call: "The president wants to create jobs, the president wants to maintain jobs."

"The president wants increased energy security and economic prosperity and that is the story of the solar industry and so I think that is entirely resonant with his rhetoric and his concerns," she added.

Major investments in solar, including NextEra Energy’s plans to build up to 5.4 GW of solar generation through 2020 and Duke Energy’s planned procurement of 2.5 GW of solar generation over the next five years, are likely be put on ice as a result of future tariffs, according to the Moody’s report.

Securitizations of solar assets could also stall as a result of a slowdown in the origination of rooftop solar loans, leases and power purchase agreements, write the Moody's analysts, who add, however, that there is a silver lining for existing solar ABS deals.

"[O]bligors under existing solar financing contracts would have a marginally stronger incentive to continue making payments, because the economic savings from their solar contracts would be higher than the then-current market savings level in their geographical region as a result of higher system costs," they write.

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