There are more than 250,000 people working in America's solar industry today.
A trade case now underway could kill a third of those jobs in one fell swoop, according to the leading national solar trade group.
When Georgia-based solar manufacturer Suniva filed for bankruptcy this spring, it issued a special trade complaint with the International Trade Commission. As part of the process, Suniva's debtor, SQN Capital Management, sought $51 million for equipment expenses at Suniva's production facilities, which it hoped to recoup through possible trade remedies.
"One of the conditions to SQN’s post-petition financing is that Suniva prosecute a petition under section 201 of the Trade Act of 1974, 19 U.S.C. § 2251 (“Section 201”). Whereas Chinese and Taiwanese manufactured solar cells are subject to U.S. tariffs, solar cells manufactured elsewhere are not," read the company's Chapter 11 declaration.
SQN even attempted to coerce the Chinese Chamber of Commerce to get its money back in a letter.
In April, Suniva filed its complaint and asked the ITC for duties on cells worth $0.40 per watt and a floor price on modules of $0.78 per watt. Trade officials accepted the complaint and are officially investigating the impact of imports on domestic solar producers. If Suniva gets the prices it's asking for, solar equipment prices would effectively double, setting the industry back by years.
It would also crush jobs in installation, sales and construction, says the Solar Energy Industries Association (SEIA).
According to new estimates from SEIA, Suniva's requested tariff levels would result in the loss of 88,000 jobs.
Those losses would come across all sectors, says the organization: "SEIA forecasts that solar jobs would be lost in all segments of the market. The utility-scale market, which has paced the industry's growth for years, would see jobs shrink by 60 percent, while residential and commercial employment would fall by 44 percent and 46 percent, respectively."
In 2016, the solar industry accounted for $84 billion in economic activity across America. SQN's quest to get its $51 million investment back could destroy tens of billions of dollars in economic activity across the U.S.
Suniva doesn't buy the numbers. The company, which has been joined by SolarWorld in the trade case, says that SEIA is creating hype, rather than issuing a thorough analysis.
“First we heard the scare tactic that 260,000 jobs were in jeopardy, now we hear a revised number of 88,000 -- and while this is yet another inaccurate scare tactic, at this rate we might hear accurate numbers by the end of summer,” said Christian Hudson, Suniva's counsel.
Here's how SEIA explained its methodology: "Suniva’s proposed remedies would set solar costs back to about 2015 levels. To that end, we looked at the difference between previously forecast solar deployment for 2018 (baseline) compared to what installations were in 2015. That showed median decreases in deployment in each state market of greater than 50% in residential, greater than 60% in commercial and 90% in utility. In some cases, 2015 was higher than expected 2018 levels; in those cases, we reduced anticipated 2018 baseline figures by 50%. This methodology might be viewed as conservative given that, since 2015, incentives and remuneration for solar have declined (from revisions to NEM, PURPA rates, etc)."
"We projected employment by state and market segment using labor intensities derived from the Jobs and Economic Development Impact model (a derivative of the IMPLAN input-output model)."
These are only preliminary, back-of-the-envelope estimates. GTM Research is currently working on its own detailed forecast, sector by sector.
The ITC is currently considering Suniva's case, and will likely issue a decision in September. If trade officials decide that imports have caused "serious injury" to domestic solar manufacturers, trade officials will recommend remedies to the president.
Trump himself -- a man who has talked extensively about protecting U.S. manufacturing jobs -- would have the final say.
Trying to figure out what the heck is actually going on? Listen to our latest deep dive on the The Interchange podcast. It'll help you understand the background and potential impact.
Editor's note: This story has been altered. We originally used the word "blackmail" to describe SQN's letter to the Chinese Chamber of Commerce. Blackmail has very specific criminal connotations, and we regret using the word. We also added additional comment from Suniva and information on SEIA's methodology.