How Tariffs On Chinese Solar Could Backfire And Destroy 60,000 US Jobs

The US solar industry is split down the middle over a case before the Department Of Commerce.

Petitioner SolarWorld — which is backed by the Coalition for American Solar Manufacturing — wants to impose tariffs on Chinese solar products to counter subsidies from the Chinese government.

Representing the other side of the industry, the Coalition for Affordable Solar Energy warns that tariffs on Chinese products will make solar more expensive, reducing demand for installation and related jobs. Indeed a full 52% of US solar jobs are in installation and another 18% in sales and distribution.

A new report commissioned by CASE warns that tariffs will lead to major job loss. In the worst case scenario, a 100% tariff that set off Chinese retaliation would destroy 60,000 American jobs by 2014.

We expect that on average module prices would be higher than currently projected over the next three years by roughly 25-30%. Price increases of this magnitude may provide some assistance to domestic producers facing a highly competitive market, but at the same time will harm consumers, resulting in a drop in overall domestic demand.

A tariff of 50% will result in between 14,877 and 43,178 fewer jobs in 2014, even accounting for production job increases.

A tariff of 100 % will result in between 16,917 and 49,589 fewer jobs in 2014, even accounting for production job increases.

In addition, the Chinese government may retaliate if a tariff is imposed on its cells and modules by imposing a tariff on U.S. products, polysilicon a key photovoltaic (PV) material. In 2010 the U.S. exported approximately $863 million of polysilicon products to China. A reduction in demand of this magnitude could result in additional job losses of 10,881, bringing the total job losses up to as many as 60,000. Losses would be even greater if exports continue to grow as expected. Additionally, we have not accounted for retaliation on U.S. export of PV capital equipment, which could lead to even further job losses.

The DOC recently extended its deadline for deciding to March 2.