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Shadow Still Hangs Over
U.S./China Solar Trade

The Solar Energy Industries Association (SEIA) in September issued a four-pronged proposal to resolve the two-year-old dispute between U.S. and Chinese manufacturers.

Ostensibly, SEIA’s plan calls for equitable concessions from both sides. SEIA called for the U.S. to remove its tariffs on solar cells from China, and China would lift its duties on U.S.-made polysilicon, the key component of solar cells.

SEIA’s proposal also calls for the establishment of the Solar Development Institute, which would be funded by Chinese manufacturers. According to SEIA, the institute would focus its resources on expanding the U.S. solar market for all participants and growing the U.S. solar manufacturing base.

However, some claim the damage inflicted domestically from illegally dumped solar panels manufactured in China since 2009 have been too severe for SEIA’s proposal to take hold.

According to a filing from the U.S. International Trade Commission, the Chinese panels began appearing en masse in the U.S. in 2009. In the three-year period that followed, there was a 1,016.5% increase in the number of Chinese-manufactured solar panels entering the U.S. market. In 2012, 1% of all Chinese exports to the U.S. market were solar panels.

In fact, inexpensive Chinese panels have caused downward pressure on U.S. providers to the point where some are no longer able to compete. For example, Milwaukee-based Helios USA filed for bankruptcy protection in September stemming largely from the glut of low-cost Chinese solar panels.

“I appreciate the constructive spirit of the SEIA proposal,” says Samuel Kwon, counsel at law firm Chadbourne & Parke. “But I’m skeptical the Chinese companies or the government would welcome it, especially at this stage, since they are still facing lengthy, ongoing trade disputes with other countries and regions on solar cells.”

Timothy C. Brightbill, a partner at law firm Wiley Rein LLP and counsel to manufacturer SolarWorld, says the plan offered by SEIA allows Chinese providers to pay less duty to sell their products here because it would require the U.S. industry to drop its successful trade cases against China.

“[SEIA’s] plan represents a short-term payoff that allows China to continue dumping illegally in the U.S.,” Brightbill says. “We support the U.S. government’s efforts to negotiate a solution with China that addresses all of China’s continued dumping, subsidies and unfair trade practices.”

Currently, the anti-dumping and countervailing-duty tariffs on Chinese solar panels range from 30% to 250%.

However, Chinese companies can avoid those duties by using solar cells from an outside third country, such as Taiwan. Those cells are currently 8% to 10% more expensive than Chinese cells. In essence, Brightbill explains, the SEIA plan would allow China to avoid the 30% duties by paying a penalty that is far less than 30% - and even less than the “cell delta” of 8% to 10%.

For his part, John Smirnow, SEIA’s vice president of trade and competitiveness, says the trade association’s primary intention was to establish a framework that could benefit U.S. and Chinese solar manufacturers.

Notably, SEIA’s proposal stopped short of including minimum pricing or quotas, a factor that Smirnow says was considered but soon withdrawn, out of concern for potentially raising costs rather than lowering them.

He says the trade association is actively engaged in ongoing discussions to broker a settlement with two Chinese trade associations, as well as with the Chinese government.

Just the same, it is important to note that unless U.S. solar manufacturers waive their rights, the sanctions to address China’s unfair trade practices will remain in place.

- Mark Del Franco

 

CALSEIA Lauds Gov. Brown
For New Solar Law

The California Solar Energy Industries Association (CALSEIA) was quick to applaud Gov. Jerry Brown for signing into law legislation that he expects will protect existing solar customers while continuing to encourage more consumers to invest in rooftop solar through continued robust incentives for renewable energy.

The legislation, A.B.327 (Perea), began life as a rate-reform bill and evolved into what has been described as one of the largest solar energy bills in the state’s history. It was the subject of much wrangling between solar sector advocates and the state’s public electric utilities.

“California is once again making history and setting a new bar for solar power,” says CALSEIA Executive Director Bernadette Del Chiaro in a statement. “With this law, Governor Brown is paving the way for truly capturing the vast potential of solar power in California.”

According to CALSEIA, the most significant aspect of A.B.327 is in its stipulation that the California Public Utilities Commission (CPUC) create a net energy metering (NEM) program that is uncapped and unlimited, thereby opening up the market to millions of new customers. Previous law capped the number of customers able to benefit from NEM incentives at 5% of a utility’s peak load. The law also makes it clear that consumers can continue to sign up for NEM as it is currently structured through July 2017.

“As the CPUC considers rules regarding grandfathering of net metering customers, I expect the commission to ensure that customers who took service under net metering prior to reaching the statutory net metering cap on or before July 1, 2017, are protected under those rules for the expected life of their systems,” says Brown in a signing statement.

CALSEIA says the governor’s signing statement is important for reassuring existing solar customers signed up for NEM that their expected returns will be protected. It also makes Brown’s expectations explicit, although the final arbiter on NEM policy and rates is the CPUC. A recent report commissioned by the state’s public utilities for the CPUC emphasized the costs of NEM to non-solar customers.

The law also stipulates that the state’s goal of getting to 33% renewable energy by 2020 is a floor, not a ceiling, allowing the state’s utilities to generate more of their energy from renewable resources.

 

California Adding 600 MW
Of ‘Shared’ Renewables

California Gov. Jerry Brown has signed shared renewable energy legislation that requires the state’s large public utilities to develop an additional 600 MW of renewable energy generating capacity. The added capacity is over and above the existing 33% renewable portfolio standard.

The enacting of S.B.43, also known as the Green Tariff Shared Renewables Program, requires each of the big three public utilities in the state to file an application with the CPUC to detail its plan to acquire the requisite renewable energy generating capacity. These so-called “green tariff plans” cover each utility’s proportionate share of the total 600 MW of new renewable energy generating capacity called for under the law.

According to the law, renewable energy generating facilities specified in a participating utility’s green tariff plan must not be larger than 20 MW. Of the 600 MW capped total, 100 MW of the added capacity will come from facilities rated 1 MW or smaller located in environmentally distressed or economically disadvantaged areas. Moreover, generating capacity is to be built as close to consumers as is practical.

Language in the legislation makes it clear that one of its goals is to enable low-income ratepayers, renters, homeowners and business owners unable to install solar power for themselves to have access to renewable energy. One section reads, “To the extent possible, a participating utility shall actively market the utility’s green tariff shared renewables program to low-income and minority communities and customers.”

Customers will be able to purchase renewable energy from their utilities not to exceed 100% of their annual consumption. No given customer will be able to subscribe to more than 2 MW, although there are exceptions for federal, state and local governments, along with schools, colleges and universities. Participating customers will pay a rate established by the CPUC.

The CPUC has until July 1, 2014, to approve or reject a participating utility’s green tariff plan.

- Michael Puttré

 

EU Largely On Track
With Renewables Targets

According to the European Environment Agency (EEA), European Union (EU) member nations are making progress toward achieving the common target for renewable energy consumption. Renewables contributed 13% of final energy consumption in 2011, which the EEA says should increase to 20% by 2020.

Overall, the EEA says EU countries are showing mixed progress toward achieving climate and energy targets for 2020, even though the union as a whole could reduce greenhouse gas emissions by 21% in 2020 with the set of national measures already adopted. While the collective primary energy consumption of the EU is expected to decrease toward the political objective of 20% reduction by 2020, the EEA says additional policy support is needed from each country.

In September, a coalition of European renewable energy industry representatives sent a letter to EU officials asking for a legally binding target for renewable energy in member nations by 2030.

 

Pa. DEP And Group Spar
Over Renewables Portfolio

The Pennsylvania Department of Environmental Protection (DEP) and environmental advocacy organization PennFuture are at odds over the state’s renewable energy standard.

Pennsylvania’s current Alternative Energy Portfolio Standard (AEPS) requires 8% of electricity generation to come from renewable sources by 2021, with a 4% mandate for this year. According to PennFuture, the DEP has told the Climate Change Advisory Committee (CCAC), a group charged with making recommendations to the department regarding climate change issues, not to consider a plan to increase the state’s renewable energy law.

In addition, PennFuture says the DEP will exclude information on how the current AEPS mandate lowers electricity rates from Pennsylvania’s next Climate Action Plan.

However, Patrick Henderson, energy executive for Gov. Tom Corbett, says that the DEP’s action plan is still being developed, and therefore, it is too soon to comment.

PennFuture also contends that the DEP revealed a proposal to the CCAC earlier this year to increase the current AEPS from 8% to 10.5%. Yet, after the DEP reviewed the proposal, it informed the CCAC that it would not be used, the organization says.

Furthermore, the DEP withdrew an analysis that illustrates how current renewable energy mandates benefit consumers by reducing electricity prices, PennFuture asserts.

Henderson argues that Pennsylvania currently has a significant renewable energy standard.

“It is critical to state that Pennsylvania already has an AEPS statute - which Governor Corbett is committed to - that, by law, annually increases required uses of alternative energy through 2021,” he says. “We also must examine the positive impact market-based approaches to energy generation is having on emission reductions across the board. Each of these factors will inform the department’s approach to the final action plan. Gov. Corbett is also committed to promoting and expanding Pennsylvania’s competitive electricity markets - which is one of the most effective approaches to growing and sustaining a diverse energy portfolio.”

Nevertheless, PennFuture is not buying what Henderson is selling.

Christina Simeone, director of the PennFuture Energy Center and chair of the CCAC, says in a statement, “This administration chooses to ignore the benefits renewable energy offers, including greenhouse gas reductions, cost reductions for electricity customers and economic development opportunities. The administration claims they have an all-of-the-above policy, yet their actions prove contrary.”

In responding to Simeone’s statement, Henderson does not mince words.

“Ms. Simeone’s statement is hypocritical,” he says. “The reality is, in nearly three years, neither Ms. Simeone nor PennFuture has taken up the administration’s offer to engage in a reasonable dialogue on energy issues - preferring instead to play the role of keyboard warriors by issuing baseless press releases instead of face-to-face discussion.” - Daniel DePalma