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Changes to Safeguard Measure on Solar Cells and Modules Would Spur U.S. Module Production, ITC Says

Wednesday, March 11, 2020
Sandler, Travis & Rosenberg Trade Report

Making certain modifications to the current safeguard measure on crystalline silicon photovoltaic cells and modules would likely result in a substantial increase in U.S. module producers’ production, capacity utilization, and employment, according to a report from the International Trade Commission.

Issued in February 2018, the safeguard on crystalline silicon photovoltaic cells and modules is applicable to imports from all countries, except certain developing countries that are members of the World Trade Organization as long as imports from these countries individually or collectively do not exceed specified volume thresholds. The tariff-rate quota portion of the safeguard imposes additional tariffs of 30 percent in the first year, 25 percent in the second year, 20 percent in the third year, and 15 percent in the fourth year on imports of (a) CSPV cells in excess of 2.5 gigawatts annually and (b) CSPV modules.

The ITC assessed the likely effect of increasing the TRQ level from the current 2.5 GW to 4.0, 5.0, or 6.0 GW, without any other changes to the remedy. The ITC found that such an increase would likely result in a substantial rise in U.S. module producers’ production, capacity utilization, and employment because those producers would gain expanded access to imported cells at lower prices (due to the application of safeguard duties on fewer cells) during the remaining two years of the safeguard measure. According to the ITC, increasing the TRQ, and thus allowing module producers expanded access to imported cells that are not subject to safeguard duties, would increase the price competitiveness of U.S. modules and reduce imports of foreign modules.

The ITC added that while these modifications are unlikely to affect the one producer currently producing cells in the U.S., module producers’ expanded access to imported cells that are not subject to safeguard duties would put downward pressure on prices for U.S. cells and reduce the operating income and return on investment of U.S. producer Suniva Inc., if it were to restart production of cells.

 

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