An official from Hilo-based ProVision Solar plans to join dozens of other businesses at a hearing in Washington, D.C., next month to testify that tariffs being levied on imported Chinese solar panels are doing more harm than good to the U.S. economy.
The U.S. Commerce Department in June hit ProVision Solar and an estimated 100 other companies around the country with retroactive tariffs on photovoltaic modules as part of an anti-dumping case against Chinese manufacturers.
ProVision’s owners made what they thought was a relatively modest purchase of low-cost Chinese solar panels for customers looking for a more affordable option for getting PV systems on their roofs. They ended up caught in the middle of a trade spat between U.S. and Chinese manufacturers.
ProVision’s order for nearly 300 panels from a company in Jiangsu province arrived in March, costing roughly $54,000. On June 6, ProVision’s owners received a letter from the Commerce Department and were stunned to learn that they were on the hook for an additional $138,000 in tariffs due to a May 17 preliminary anti-dumping decision.
The federal agency ruled that Chinese manufacturers were selling PV panels in the U.S. at below-market prices and ordered importers to pay duties from 31 percent to 250 percent, among the highest in U.S. history. The Commerce Department also granted a "critical circumstances" ruling, which allowed tariffs to be imposed retroactively on any shipment that arrived 90 days before the ruling was issued.
ProVision was hit with the full 250 percent penalty and an additional 3.6 percent countervailing duty calculated to address Chinese government subsidies.
"Writing that check for $138,023.33 to cover that required bond was one of the most painful things I’ve had to do as a business owner," said Marco Mangelsdorf, who co-owns ProVision Solar with Douglas Bath. "Fortunately that didn’t break us, and I’m hopeful that the International Trade Commission will reverse the critical-circumstances finding when they make their final determination in November."
The Commerce Department and the ITC began looking into the possibility of Chinese dumping after receiving a complaint in October from SolarWorld Industries Americas Inc. SolarWorld’s parent company is based in Germany.
The ITC, an independent federal agency that has the power to overrule or reduce Commerce Department tariffs, has set an Oct. 3 hearing and is scheduled to make a final determination in the case by Nov. 7.
Although the ITC’s primary role is to determine whether U.S. solar panel makers are being injured by allegedly dumped or subsidized Chinese products, Mangelsdorf is hoping they will consider the adverse impact of the retroactive tariffs on small companies like his.
"I essentially will say two things: One, we had no intention to beat these tariffs by putting in the order when I did. I was aware of the complaint by SolarWorld, but my intention with a single order from China was not to circumvent whatever tariff would eventually be announced," Mangelsdorf said.
"This also is a very punitive tariff, and while I may be able to pony up and write a check, there are a number of small American companies importing Chinese modules that are being pushed to the point that they are going under," he said. "The practical effect of Commerce’s action in many cases is devastating small American companies."
Chris Greacen, owner of Seattle-based Small Steps Solar, which makes portable solar-powered products, said the tariffs could force him to close.
"If we have to pay this tariff it will be devastating to our small company and have a huge impact on the personal finances of our young families as well. Clearly, this is not the intended result of the U.S. Department of Commerce, nor, I believe, of the petitioners," Greacen wrote in a letter to Commerce Department officials.
The Commerce Department estimates that about $930 million worth of solar cells were imported into the U.S. between February and May. No estimate was given for the tariffs collected, although William Perry, a Seattle attorney who represents some companies hit with the tariffs, said they likely totaled $100 million or more.
Outside of a few local companies like ProVision that imported Chinese panels directly, it doesn’t appear that the tariffs had a significant impact on Hawaii’s PV industry, said Gabriel Chong, president of the Hawaii Solar Energy Association.
"Most of our member companies buy their materials through on-island vendors, such as R&R Solar Supply or Interisland Solar Supply, both of which sold predominantly SolarWorld modules, which are U.S.-based models," Chong wrote in an email. "Because of this, I don’t think many other companies should have had much issues."
