The announcement of the Office of the U.S. Trade Representative (“USTR”) on January 22, 2018, that the Trump Administration is granting relief for the domestic solar panels and modules industry under section 201 of the Trade Act of 1974, confirmed the fears of many consumers that substantial additional duties would be imposed on those products. USTR announced that the relief would come in the form of a tariff increase of 30% in the first year, decreasing to 25% in year two, 20% in year three, and then to 15% in year four. On January 23, 2018, President Trump signed the Proclamation implementing the relief. The relief will go into effect on February 7, 2018.

Despite the above tariffs, the relief announced provides that the first 2.5 gigawatts of imported cells are excluded from the additional tariffs. The use of the exemption for the first 2.5 gigawatts makes the relief a form of a “tariff rate quota,” meaning that tariffs only apply if imports rise above a certain quota amount. This type of relief has been imposed in the past, including on certain steel products. The ITC Commissioners made various recommendations to the President in this case, some of which included types of tariff rate quotas.

The nature of the relief will mean that exporters now are likely want to rush to import their products in order to be within the 2.5 gigawatt exclusion. The Proclamation states that the quota of 2.5 gigawatts “shall be allocated among all countries except those countries the product of which are excluded from such tariff rate quotas…” While this statement seems to imply that there will be a base time period used to determine different market shares within the total quota for different countries, our discussions with government officials indicate that this was not what was intended. Instead, the intention was to have one worldwide quota of 2.5 gigawatts that will apply to all countries, without any allocation among countries. Regardless of whether allocations are made among countries or there is just one overall quota, if shipments are made in the hope that they will fall within the exclusion but the 2.5 gigawatt quota already is filled at the time of entry, the 30% tariff that then will be applied may change the economics of a deal if the possibility of a tariff has not been taken into account. It is not clear at this time whether there will be some kind of pre-clearance for such imports before the time of exportation, or whether there will be a free-for-all at the time of entry. Continue Reading Solar Panels and Modules Trade Decision Creates New Uncertainty for Purchasers

Last night the Senate Finance Committee released its own tax overhaul bill, which will be taken up next week by the committee.  The legislation retains important tax credits for wind developers, setting up a likely showdown with the House of Representatives during conference committee negotiations over the legislation before the end of the year.

The Production Tax Credit (PTC) enjoys outspoken support from an important bloc of Republican Finance Committee members, including Continue Reading Senate Version of Tax Bill Retains Incentives for Renewables

In December of 2016, Illinois Governor Bruce Rauner signed into law the Illinois Future Energy Jobs Act (Energy Act).  One principal purpose of the Energy Act is to add a new Zero Emissions Credit to Illinois’ existing Renewable Portfolio Standard (RPS).  The new Zero Emissions Credit received a lot of media coverage because it is designed to provide additional compensation to Illinois’ operating nuclear power plants. Because the costs for the credit will be paid for as a pass-through charge via a tariff by Illinois’ electric utilities, Illinois businesses will undoubtedly see their costs for procuring electricity increase.

In addition to creating the credit, the Energy Act also Continue Reading Illinois Act Encourages Growth of Commercial-Scale Solar

On October 31, 2017, the United States International Trade Commission (the “Commission”) announced its remedy recommendations for the Section 201 Investigation on Crystalline Silicon Photovoltaic (“CSPV”) Cells and Modules.

The Commission will send its report along with its remedy recommendations to the President by Continue Reading ITC Recommends Remedies in Solar Cells Section 201 Case

As we discussed in a previous post, the International Trade Commission (ITC) found that U.S. producers are being seriously injured or are threatened with serious injury by imports of silicon photovoltaic cells and modules.  As the case now advances to the remedy phase, companies, countries and trade organizations on all sides of the matter weighed in with their official recommendations for a suggested remedy.

Petitioner, Suniva, lowered the tariff suggestion from its original filing from $0.40 to a minimum of $0.24 per watt for standard crystalline silicon photovoltaic (CSPV) cells, with similar proposals from California-based manufacturer Auxin Solar and Oregon’s SolarWorld Americas. Continue Reading U.S. Solar Manufacturers and Foreign Parties Offer Trade Remedies to ITC

Husch Blackwell international trade attorney, Jeffrey Neeley, and energy attorney, John Crossley, hosted a teleconference in which they discussed the implications of and next steps in the US International Trade Commission’s (ITC) ongoing case that imported crystalline silicon photovoltaic (CSPV) cells and modules have caused “serious injury” to domestic manufacturers.  A detailed summary of the ITC’s September 22 finding of serious injury is detailed in Jeff’s previous post.

Follow up analysis during the teleconference included:

  • ITC vote on injury to the US industry
  • Upcoming hearing for potential remedies set for October 3
  • Possible remedies and their impacts on the industry
  • Strategies that US importers and consumers may want to consider

A recording of the teleconference is now available (due to technical difficulties, the recording begins approximately 1:00 into the call).

The U.S. International Trade Commission (“ITC”)  found that U.S. producers are being seriously injured or are threatened with serious injury by imports of silicon photovoltaic cells and modules. The case now moves quickly to the remedy phase at the ITC. Prehearing briefs on remedy must be filed by the parties by September 27, a hearing on remedy will be held on October 3, and post-hearing briefs will be filed on October 10. The ITC is scheduled to vote on remedy on October 31 and will send it recommendations to the President by November 13. The President then will have 60 days to accept or modify the recommendations of the ITC. Continue Reading ITC Finds “Serious Injury” to U.S. Manufacturers from Foreign Imports of PV Cells and Modules.

energy_solarSuniva, Inc., a bankrupt U.S. producer of crystalline silicon photovoltaic (CSPV) cells, filed a petition with the U.S. International Trade Commission (ITC) seeking relief from the effects of importation of foreign manufactured CSPV cells and modules. Suniva requests relief in the form of a minimum price for solar modules imported into the United States and imposition of an additional four-year tariff on all imported CSPV cells and modules that would establish a price-per-watt for inbound foreign competitors double that of current levels.

The requested relief calls for Continue Reading Proposed Tariffs Could Dramatically Affect Expansion of U.S. Solar Industry

Husch Blackwell and the Texas Renewable Energies Industries Alliance have teamed up to produce a webinar series focused on the Texas solar industry, titled “On the Horizon”. Register here for the final webinar in the series, in which Husch Blackwell’s Chauncey Lane and Jason Reschly will focus on solar development finance and the investor tax credit.  They’ll give advice on tax requirements to qualify for solar tax credits, discuss tax issues for structuring transactions, identify trends in Continue Reading Webinar: Solar Finance and the Investor Tax Credit

On the Horizon imageHusch Blackwell and the Texas Renewable Energies Industries Alliance have teamed up to produce a webinar series titled, On the Horizon, focused on the Texas solar industry.  The latest installment focused on solar leases and mineral right issues and is now available on-demand. The panelists discussed recommended provisions for solar leases including steps solar project developers can take to anticipate mineral estate operations and lessen the potential impact of right of access under the Texas’ Accommodation Doctrine.

Register here for the final two webinars of the year: Continue Reading Texas Solar Webinar Series