Import License Fees: A Reasoned Argument For A Tariff Alternative

By Frank Andorka, Senior Correspondent

Let me start by stipulating that American jobs are important to me. Let me further stipulate U.S. manufacturing jobs are of particular importance to me. I come from blue-collar roots two generations back, and I am fully on board with keeping manufacturing jobs in the United States and using the levers of government, when necessary, to do so.

But these tariffs on solar are killing me, and they are doing real harm to the industry. As we’ve reported, companies like Cypress Creek Renewables are canceling enormous numbers of projects, which means jobs not created and jobs lost. The “return” of solar manufacturing jobs in the module segment remains largely mythical, with gains being modest at best and nonexistent at worse.

With each passing month, it becomes ever more clear that tariffs were the wrong governmental lever to pull to save the solar manufacturing industry. What, then, should government be doing instead?

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That’s a question that has been kicked around here at SolarWakeup with its proprietor, Yann Brandt, who is far more involved in the financial end of solar than I have ever been (Yann has actually done deals; I’ve only written about them). And he has a proposal that sounds reasonable to me that I think is crazy enough it just might work: import license fees.

The program would work like this: The U.S. government would add a 3-cent import license fee to every imported module. By our calculations, that would generate $300 million on every 10 GW of imported modules. Compared to the 30% tariffs importers are currently paying, that’s a tiny drop in the bucket and might even allow an increase in inexpensive imports to come into the country. The flow of modules would reignite interest in projects currently in question and would stop the hemorrhaging of jobs from the downstream solar industry – where most of the jobs, as we’ve repeated ad nauseum, are.

Once the money is collected, it could be distributed evenly across all module manufacturers on a simple formula: total money collected divided by the total number of watts produced. The resulting boon to the admittedly struggling U.S. module segment would allow for the companies to come up with the next revolutionary discovery that will reshape the solar industry not just in the United States but the world.

Import license fees are a far more equitable, thoughtful and effective way of rebuilding the U.S. solar module manufacturing industry. But first, the tariffs have to go – and soon. Otherwise, not even license fees will stop the slowing of the project pipeline, damaging the industry for years to come.

More:

It’s Not Just Us: PRI Finds Trump’s Tariffs Are Tarnishing Solar’s Shine

The Tariffs Are Taking A Devastating Toll

11 States To Feel Sting Of Cypress Creek Retrenchment

Low And Behold, GOP Finds Solar Tariffs To Be A Bad Idea

No New Natural Gas Plants For Vistra, Dominion, As Solar Soars, Reuters Reports

By Frank Andorka, Senior Correspondent

Solar’s continued ascendancy – now reaching nearly 2% of all electrical generation in the United States – is coming at the expense of combined-cycle natural gas plants.

Two of the nation’s largest utilities – Dominion Energy and Vistra Energy Corp. have announced they will no longer build natural gas plants because the underlying economic case for them is disappearing in solar’s shadow, Reuters reported late last week.

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Vistra and Dominion are only the latest utilities to bow to the new electrical-generation reality. In states like California, Arizona and New Mexico, public utilities commissions are increasingly skeptical of the need for natural gas plants as “baseload power sources.” Instead, they are insisting utilities begin the process of transforming power generation mixes to include renewable energy + storage instead.

As the price for utility-scale solar continues its downward trend, the need for more expensive natural gas peaker plants is disappearing. It’s having a real effect on the producers of natural gas plant component providers like GE Power and Siemens.

As Reuters reported:

This bearish view of fossil-fuel energy, reflective of a growing acceptance by utilities of renewable power sources, poses a hurdle to John Flannery’s plan to turn around General Electric Co’s (GE.N) $35 billion-a-year power unit.

Dominion’s plans are particularly aggressive. From Reuters:

In Virginia, Dominion Energy ended several maintenance contracts it had with GE this year when it mothballed a large gas-fired plant built by companies GE later acquired and idled seven other coal and natural gas units in the state.

Dominion aims to build 4,720 megawatts of solar by 2033, the equivalent of about five large combined-cycle power plants.

It is opening a new combined-cycle natural-gas plant in Virginia this year, built with GE and Mitsubishi equipment. It said it has no current plans to build more such plants.

“Solar is very cheap,” spokesman Dan Genest said. “These units were just not cutting it.”

As SolarWakeup has reported, some experts are predicting the natural gas boom that had been anticipated as utilities transitioned to renewable power may no longer be a reality.

More:

General Electric’s power unit fights for growth as wind, solar gain (Reuters)

Renewables, FTW! Price Drops Send Natural Gas Reeling (SolarWakeup)

Will Natural Gas Lose Its Place As A Transition Energy? (SolarWakeup)

Natural Gas Plans Hit Snag For Arizona Utility (SolarWakeup)

Haiti Hits Solar Benchmarks As Electrification Drive Continues

By Frank Andorka, Senior Correspondent

Like Puerto Rico, Haiti is a country that often only finds its way into the U.S. consciousness if something bad happens on the island nation. But one year after its new president launched his “Change Caravan,” there is potentially good news coming about the rural electrification of the country – and solar has played a critical role.

More than 7,000 individual solar systems have been provided since May 2017 to households in 11 of the most rural areas of the country. The government’s press released notably does not say installed, so it’s unclear how many of the systems are actually producing electricity at this time.

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The country’s central solar power plant has also been reinforced and multiple community solar plants have been installed.

The push for solar electricity is part of President Jovenel Moïse’s major initiatives to electrify the country’s rural areas and provide everyone in the country 24-hour electricity by the end of his term.

Moise’s “Change Caravan” is his attempt to improve the country’s infrastructure more rapidly than ever before, to improve the country’s independence and resilience in the face of natural disasters like earthquakes and hurricanes.

As Steve Hanley reported in CleanTechnica earlier this month, “a study by Worldwatch calculated that Haiti receives about the same amount of sunlight annually as Phoenix, Arizona. Much of Haiti’s electricity comes from diesel generators. With the high cost of imported diesel … solar costs less than electricity from the grid the first day it is installed.”

Hanley added:

The government is fully supportive of the effort to bring renewable solar power to the country. Last September, parliament eliminated all import duties and tariffs on solar equipement, Forbes reports. Economy and Finance Minister Jude Alix Patrick Salomon stated in an interview with Haiti newspaper Le Nouvelliste, “we wanted to encourage, as part of this budget, the acquisition of equipment from alternative sources of energy.”

More:

10Power Leads Haiti Toward A Sustainable Future Powered By Solar Energy (CleanTechnica)

Put Another Solar Vote Into Congress: Sam Jammal, CA 39

By Frank Andorka, Senior Correspondent

It feels as if the solar industry talks a lot – a lot – about how important federal policy is to pushing the solar industry forward. Which is why, when you have the chance to vote for a strong solar advocate and add another voice to the Congress in favor of our industry, we should do it.

Meet Sam Jammal, who is running for the soon-to-be-open California’s 39th District (CA-39) in north Orange County.

Jammal comes from a solar background, having worked for Tesla/SolarCity, where he traveled the country speaking on solar issues. As he talked to people around the country, he realized how much the industry needed more vocal support on Capitol Hill. So when his current Congressman announced his retirement, Sam Jammal decided to run as a Democrat in what has traditionally been a pretty conservative county – in large part because he believes strongly that solar will be the way the country is powered in the future. And not some distant future, either.

“We have about 1,500 solar employees in the district,” Jammal says. “We can’t have enough allies in the halls of Congress to fight for them, and I’m planning on being one of them.”

It won’t be an easy task for Jammal to win the race – and not just because he’s a Democrat running in a traditionally conservative county. Under the election rules in California, it’s an open primary and a Top 2 system. What that means practically is that all voters, no matter what their party affiliation, will vote in the same election. And only the top two vote-getters – again, regardless of party – will face off against each other in the fall.

Jammal says the key to winning in this situation will be turnout, so he asks all of us to get behind him and spread the word about his pro-solar candidacy. And if you live in his district and are one of those 1,500 solar employees, spread the word among your colleagues and, and we can’t stress this enough, VOTE.

You should listen to the entire podcast because Sam Jammal has a lot of interesting things to say, and we believe he’ll make a strong candidate in the fall if he gets into that Top 2. Visit his website to learn more about him.