Draining the Flooded Markets: Tariffs, Suniva & Solar Energy Investment

Abstract

ABSTRACT:Demand for solar energy in the United States has increased significantly over the past half century. Despite the falling costs of solar infrastructure, the United States solar energy market is at a turning point. In 2017, two insolvent U.S. solar manufacturers, Suniva and SolarWorld America, successfully petitioned the International Trade Commission (ITC) to invoke Section 201 of the 1974 Trade Act. The two U.S. manufacturers argued that a surplus of imported Chinese solar panels has driven the cost of solar infrastructure too low and forced them out of the market. The ITC responded by recommending tariffs on global solar photovoltaic (PV) panel imports, which were then implemented by President Trump in early 2018. This note addresses the negative effects that PV import tariffs have on investment in the U.S. solar energy market, posits that a free-market approach toward PV panel trade will maximize investment in solar energy, and explains that imposing tariffs on PV panel imports leads to more net harm than good.