Hacker News Reader

Comment by meri_dian | Hacker News Reader

This is not necessarily a move against renewables as a whole.

>"The duties are lower than the 35 percent rate the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers. The idea behind the tariffs is to raise the costs of cheap imports, particularly from Asia, and level the playing field for those who manufacture the parts domestically."

This is largely in support of American manufacturing. Of course it will harm the solar industry through increased prices, but Trump here is balancing an interest in solar with an interest in American industry.

View on HN

This is a further twist of a stupid US policy.

Solar panel manufacturers cried foul while China simply out-managed the US players on the supply chain, so the US slapped tariffs on Chinese finished panels. China says, ok, so that's how you want it, and then they slap tariffs on cheap US-manufactured polysilicon. Most Americans (and sadly, most American politicians) don't know that up until recently those cheap Chinese solar panels started life as gravel, coal, and wood chips in America's rust belt. And jobs. Well, not anymore. South Korea, not near as foolish as the Obama administration, and not subject to the same high retaliatory tariffs, is now taking over the lead position in polysilicon. They didn't even say thanks.

Let's tour a polysilicon plant near Moses Lake, WA. Whoops. Closed down a few years ago when they couldn't compete with other countries for China's voracious polysilicon appetite. Hemlock Semiconductor, once the largest polysilicon manufacturer in the world, is hemorrhaging jobs left and right in Michigan. Both Hemlock and Wacker announced huge new polysilicon plants in Tennessee, investing billions, then mothballing them before they hit production because Uncle Sam suckerpunched the US polysilicon industry by playing anticompetitive with the US solar panel industry.

This made sense to an extent when the Democrats were in charge, because US solar panel factories were in blue voting areas and US polysilicon factories and suppliers were in red voting areas. Now it's simple pandering and incompetence.

Be careful with labeling it "American manufacturing". We've lost our worldwide leadership position and while we may buy American more at home, the rest of the world is moving on without our dominance.

I agree about 90%. The Wacker plant in Tennessee was actually completed and is currently operating, though. There is excess capacity for high-quality, low-cost polysilicon in the US to be soaked up if some more American wafer/cell facilities are developed (since the product can't go to China any more).

And US based cell manufacturing may indeed grow; Tesla is one driver, and JinkoSolar might be the next in line:

https://www.pv-magazine.com/2018/01/22/jinkosolar-looks-to-s...

I have a little hope that this might also finally get Hanwha Q Cells and 1366 Technologies to launch a full-scale manufacturing partnership. I really like what 1366 has invented but if they wait years more to go industrial-scale they'll get their cost advantages erased by continued incremental improvements in traditional wafering.

These tariffs are not going to make American solar manufacturing dominate the global solar market. It might end up like with foreign automobile trade wars in the 1980s -- factories owned by overseas companies, but actual manufacturing operations in the US.

I'd prefer if we didn't go through several years of artificially elevated prices from these tariffs in the first place, but I think there's a decent chance it will actually lead to new American factories for cells and modules. Those plants will need to be bigger scale than past American facilities if they don't want to die as soon as the tariffs expire. Suniva's biggest problem IMO is that they were trying to manufacture in America at ~5% the scale of globally competitive manufacturers. They were unprofitable so they didn't scale up, and they didn't scale up because they were unprofitable.

> This made sense to an extent when the Democrats were in charge, because US solar panel factories were in blue voting areas and US polysilicon factories and suppliers were in red voting areas. Now it's simple pandering and incompetence.

I don't follow. Don't both scenarios wreak of pandering and incompetence?

There's not much balance - there are tons of people working to install solar panels, and very few producing them. He's harming the former and probably won't do much for the latter, long term. Not to mention people purchasing the things, and, while we're at it, the environment, because solar is by and large a lot better than many alternatives.

The correct response when someone who is sort of a competitor is selling you stuff below cost is probably to buy lots and lots of it.

Yep, a better approach would have been to enforce a labelling standard for the efficiency of the panels, furthering the cause of commodifying them. Then when the dumpers finally jack up the price (their long term strategy), people just switch suppliers.

I don't think Trump would have went for that solution tho, since he wants to kill EnergyStar: http://e360.yale.edu/features/killing-energy-star-a-popular-...

> There's not much balance - there are tons of people working to install solar panels, and very few producing them. He's harming the former and probably won't do much for the latter, long term.

Except that quite a few of the cheaper Chinese-made solar panels have shorter lifetimes than the American-made ones did.

Consequently, installers have started getting burned because they are getting warranty claims much sooner than they should be. And, of course, the supplier of the Chinese panels is long gone. And most of the American suppliers have been driven out of business by the cheaper prices--which means the installers can't switch to more reliable panels.

Now, do I think Trump thought about any of this? Not even slightly.

However, because solar panels are durable goods (or perhaps you prefer "capital expense") the calculus is a bit more complicated than just "cheaper is gooder".

Where do you learn all this stuff?

In this instance, I knew a couple people who did solar installation businesses early on. They did very nicely with the uptick in business, but then sold out.

All of them specifically cited the Chinese flood with causing them to cash out.

They weren't prescient enough to predict the drop in actual reliability, but they could see very quickly that they were going to be the ones holding the bag on warranty claims with Chinese suppliers. And, if they didn't use Chinese suppliers, they couldn't compete on price. So, they just got out.

Very interesting take on it.

This is an interesting move strategically. By making US-based solar panel manufacturers artificially more competitive, this tariff will allow them to develop in-house expertise and reduce dependency on China for the manufacturing stage of the supply chain.

If solar eventually becomes an important source of power, the US would not want to be wholly reliant on a geopolitical rival for manufacturing expertise. This could thus be construed as a vote for the long-term dominance of solar as an energy source.

While this is possibly true, this is also the most wishful of interpretations for the Trump administrations actions. It's much simpler and more likely to interpret the action as anti-solar & renewable, and pro fossil fuel.

Unless it's also backed up with added incentives to manufacture solar in country. I predict that won't happen, and even if it did new plants of any significance would be 5-10 years out and in the meantime all we've done is shot ourselves in the foot.

If he wanted to be true anti-solar, he'd work on killing the ITC (tax credit) that people are using to offset the cost of solar today (though it will fully disappear in ~4 years at the current schedule).

Before the final turns of the tax bill, I think the PTC solar credit was on the chopping block in the senate version. I suspect the ITC is temporarily protected by needing some extended regulatory process timeline to kill as early. I'm no tax expert but I recall reading that the PTC is more oriented to commercial solar producers and ITC residential.

I suspect the only real hold back of the administration is that it is understaffed to fully attack all of the solar programs effectively.

> If he wanted to be true anti-solar [...]

No true Scotsman. One doesn't exclude the other. Perhaps this is even next on his list, who knows (lets not give him ideas wink)

Trump read Hacker News? I wouldn't worry...

>>> killing the ITC (tax credit)

Raising taxes isn't a big priority for him atm. Those pro-solar deductions are used by a great may companies.

Chinese solar panels are already artificially more competitive because of the Chinese government's policies, this is just evening the playing field.

It's already clear that solar is only getting cheaper and more viable globally, this is a long term vote for maintaining our national security by guaranteeing that an entire industry can compete with foreign companies that are subsidized by their governments.

Fascinating, to see how 70s union arguments are recycled.

There is a gazillion other imports that can be targeted with a tax. The most important thing for solar is to expand adoption by keeping costs low. Solar is such a small industry that it will have zero impact on American manufacturing overall. This tax will only raise costs of solar without doing anything for domestic manufacturing

It will certainly impact American solar manufacturing, which many people would see as worthwhile.

Most solar jobs are in solar install, which it will impact adversely. Solar manufacturing will see an increase, but it is mostly capital, not labor, intensive.

It could still make sense but I haven't seen a lot of the full rationale.

And it's likely to inversely impact US solar installations as it raises the price to install them in the USA.

Also note that unless this is done within the WTO framework, it is likely to start/escalate (depending on your interpretation of previous events) a "trade war" (arms race of tariffs) which ultimately hurts the US consumer.

It will have zero effect on US manufacturing in 2018. When photovoltaic panels become the source of the majority of electrical power in the mid-2020s, it will have an enormous effect on US manufacturing.

there are nearly 3 million solar jobs in China. if there were 3 million solar jobs in the US, that would be yuge!

China also sells to the rest of the world. Who will buy overpriced American solar panels?

I think that the idea that the US can't manufacture things cost-effectively is as dangerous as it is ludicrous.

China will be selling to less of the rest of the world once the rest of the world stops allowing economic dumping from China.

They aren't necessarily overpriced, but China has a big trend of government heavily subsidizing it's "strategic" industries, of which solar is one.

https://www.scientificamerican.com/article/why-china-is-domi...

Of course the point is to put everyone else out of business or crippled so China can reap all the profits. It's a fairly common monopolistic tactic.

The problem is that the US's comparative advantage over China will surely be solar services (installation, maintenance, support) rather than raw hardware manufacturing. And the solar service industry is hurt by tariffs on Chinese panels.

Why can't it be solar manufacturing as well? The US has cheaper AND cleaner electricity than China and our engineering knowledge is among the best in the world.

Solar Fabrication plants are being made in the USA, and from my understanding, we have higher-tech panels which reach higher levels of efficiency. If the solar manufacturing industry gets a boost in the US, then we can likely make them cheaper too, due to the scaling of mass production.

> The US has cheaper AND cleaner electricity than China

This is a nice read: https://www.americanprogress.org/issues/green/reports/2017/0...

Quote: "The nation is on track to overdeliver on the emissions reduction commitments it put forward under the Paris climate agreement"

And: "Compared with the Chinese coal fleet, even the best U.S. plants are running older, less efficient technologies."

China has to clean up their coal power plants though, they have a lot of them and need the power they produce. They consume ~5x the coal that the US consumes:

https://www.eia.gov/todayinenergy/detail.php?id=16271

Cleaner coal plants in China are still dirtier than natural gas plants in the US.

US Coal may be behind, but overall, the US is cleaner. US has more nuclear, natural gas, and more renewables (Hydro, Wind, Solar) than China.

There's a few way to slice the data.

China greenhouse gas emissions per capita are less than half the USA's.[1]

1. https://wri.org/blog/2014/11/6-graphs-explain-world%E2%80%99...

In 2016, China had 70 GW of installed solar power, compared to 40 GW in the US. They installed another 50 GW in 2017.

China has 320 GW of installed hydro power, compared to 80 in the US.

China had 160 GW of installed wind power in 2016, compared to 80 in the US.

For a tariff that hurts one industry but helps another, it's comparative advantage, not just advantage, that is relevant. (Even if country A is better at making both product X and product Y than country B, introducing trade between A and B can result in manufacturing of Y migrating to country B.)

https://en.wikipedia.org/wiki/Comparative_advantage

Thx, its always cool to learn new economic tidbits.

Also, it's arguably good for the long-term health of renewable energy as a whole, since China would presumably want to turn a nice big profit on their investment once they'd driven all the other manufacturers out of business and the expertise to actually do so had been lost elsewhere.

Maybe, or maybe not. Clothing imported from China didn't get expensive even after most onshore American clothing production ceased.

Clothing manufacturing is labour-intensive, relatively low tech, and just hops countries when labour gets more expensive in one place. Solar panels manufacturing has none of those properties. The general reckoning is that the Chinese government is subsidising local manufacturers, once the competitors close down and stop the expertise required to set up manufacturing elsewhere will decay and be lost and they'll have everyone over a barrel, and competing on cost of labour is irrelevant since it's such a small component of the cost.

A significant proportion of clothing production has moved to places like Bangladesh and Thailand (as labour costs in China rose over the last decade), and I'd wager that maintains the pressure on China to keep their prices low and not be able to gouge now that American manufacturers are mostly out of the picture.

I think this is the right response. Throughout history, you see that when countries preserve their manufacturing, their economy, as a whole does better. We've seen it with the rise of China over the past few decades, isolationist Japan during their industrial revolution, and even America with their industrial revolution.

Why not target oil/coal/all energy sources to remove the obvious bias?

Because it’s easier to incentivize Renewable Energy than it would be to battle the oil giants.

I see it as a win for both sides. Dems get to put on show that they care about the planet. Trump gets to put on a show he’s saving the planet and American manufacturing.

Or because Trump and his campaign take huge money from the oil companies? It is a win-win for Trump, he can boast himself about protecting US jobs and interests of his money donors.

Acting as if it’s only Trump or even republicans taking oil money is short sighted.

Obama could’ve done the same? Actually he decided to lift a ban on Crude Oil exports. The oil from shale and fracking that flooded the markets in the past years.

> Actually he decided to lift a ban on Crude Oil exports. The oil from shale and fracking that flooded the markets in the past years.

Obama's admin was more tempered when it came to oil+gas+petrol+coal.

The admin increased exports, but it also restrained oil exploration in US waters (especially after Deepwater Horizon) and didn't open exploration to most of Alaska's National Wildlife Refuge (ANWR) or just rubberstamp the Keystone XL pipeline (ironically the smaller Keystone pipeline had a fairly large spill the same week as the Trump admin approved the Keystone XL).

That's not to say that the Obama Admin was nearly as "anti-oil" as it was portrayed in conservative-biased news. They were remarkably accommodating when the cost-benefit analysis was positive for the country.

The oil & gas industry gave almost exactly the same amount of money to Trump and Clinton: https://www.opensecrets.org/industries/recips.php?ind=E01&re...

I don't see how the fact that they gave money to both major candidates is supposed to dispel the idea that they get favorable treatment because they try to buy favor. If anything, it supports the idea (since otherwise you'd expect them only to give to the side they liked better).

If you think pittance bribes from oil companies is enough to sway Trump, you're likely mistaken. Realistic valuations put him at around $2-3 billion, and a large majority of his campaign was self-funded or from small individual donors. No petrol donor will be able to discreetly donate more than he can make just having a portion of his wealth track the market.

There's a lot of things to be said about Trump and economic protectionism, but saying it's entirely fueled by donor pressure is oversimplifying the situation.

> and a large majority of his campaign was self-funded or from small individual donors.

Source, please? Given the absurd amount of corruption going on in the administration (i.e. the missing inaugural funds and Mar-a-lago vacations, to name just a tiny fraction) and Trump's own charities, I find the idea that he spent even a penny of his own money on his campaign laughable based on first principles. I haven't seen any evidence to the contrary, other than his own patently unreliable rhetoric.

https://www.politico.com/story/2016/09/trump-shatters-gop-re...

http://www.politifact.com/truth-o-meter/statements/2017/nov/...

"Trump received about $239 million from donors who gave less than $200 in total. That amounts to 69 percent of the Trump campaign’s individual contributions;

Hillary Clinton received about $137 million from $200-or-under donors. That made up 22 percent of the campaign’s individual contributions;"

https://www.usatoday.com/story/news/politics/onpolitics/2016...

"President-elect Donald Trump didn't need $100 million of his money to win the White House in the end.

Trump contributed another $10 million to his presidential campaign in the closing days of the election, bringing his total investment in the race to $66.1 million, new filings confirm."

According to [1], Donald Trump did not make a single contribution to his own campaign except in the form of loans (based on my limited understanding of how the FEC reports this stuff, cross referenced against a candidates' filings who I know for certain loaned their own money to their campaign). Given that his campaign machinery started fundraising for 2020 the day after his inauguration, I feel that it is highly disingenuous to claim that those loans were in any way true political contributions.

[1] https://www.fec.gov/files/bulk-downloads/index.html?prefix=b... (I wasn't able to load indiv16.zip and analyze it but the total loan amount from the other data is a only few million shy of the $66 million total).

Excellent and informative sources, thanks.

Maybe the idea is that the oil companies have to get in line behind all the other awful people paying exorbitant prices to have their entire delegations stay at Trump hotels and resorts? "I'm making so much money from this new classy phenomenal corruption that everyone is talking about, that I can't even be arsed to worry about that other corruption that the Washington insiders like!"

Is China dumping subsidized oil/coal into the global market?

Yes.

Everyone is subsidizing fossil fuel production. Most countries agreed a few years ago that they were doing so and promised to stop, but little progress has been made on that.

The IMF has some numbers here:

https://www.imf.org/en/News/Articles/2015/09/28/04/53/sonew0...

About 7% of global GDP in subsidies.

China is the highest by dollar amount, Ukraine highest per capita.

Because Suniva went out of business and complained about low foreign solar panel prices to the International Trade Commission.

Reply on news.ycombinator.com