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The U.S. solar industry was finally dealt a blow this week by the Trump administration after it was spared from having key breaks ended in the GOP tax overhaul and the dulling of its competitive edge in a recent Energy Department proposal. It took the form of a tariff.
On Monday, the administration announced it would impose a 30 percent tax on imported solar panels, before falling to half that in the fourth year after taking effect.
The usual suspects — environmentalists, along with their Democratic allies — cried foul, bemoaning yet another twist of the screw from Trump restricting the development of renewable energy.
But another set of Washington interests was up in arms as well. Representatives from a Who's Who of conservative organizations — the Heritage Foundation, the R Street Institute and the American Legislative Exchange Council — have voiced opposition to the new solar tariffs, too.
“Solar has long had strong bipartisan support because it powers hundreds of thousands of American jobs, gives consumers choice, and helps keep energy prices down,” said Abigail Ross Hopper, president and chief executive of the Solar Energy Industries Association, the main lobby shop in Washington for the solar industry.
That said, she added: “This trade case brought together an even broader coalition of conservatives who oppose the government inserting itself into the market.”
“Here at the Heritage Foundation,” the think tank’s Tori Whiting told an audience Tuesday, “we believe that trade policy, through specific cases or more generally, should not be about tipping the scale toward one American industry or interest group over another.”
The solar lobby has not always had Heritage as a friend — previously arguing against tax credits meant to encourage solar energy installation.
Trump's announcement this week that he would impose a tax on certain solar equipment — Trump also decided to tax the first 1.2 million washing machines imported each year by 20 percent — is arguably the most significant protectionist action Trump has taken during his 12 months in office. He was elected promising to crack down on unfair trade practices, especially with China, but his administration has so far been more rhetoric than action in this arena. (Expect more red meat from U.S. trade officials in Davos this week: read my colleague Tory Newmyer in The Finance 202 for more on the subject.)
But the choice was one that happened to fall into the president's lap. In October, the U.S. International Trade Commission concluded imports hurt domestic solar-panel manufacturers — namely, two bankrupt manufacturers, Suniva and SolarWorld — kicking the decision as to whether to impose a tariff on overseas solar panels to the president.
Green or not, the solar business is still a business. True to their core, traditional free-trade Republicans do not want to see international commerce encumbered by tariffs or other trade barriers.
However, analysts say the short-term tariff will do little to buoy Suniva's or SolarWorld's fortunes, or to encourage more domestic panel factories. “Anyone expecting a U.S. manufacturing renaissance as a result of these tariffs is set to be disappointed,” said Hugh Bromley, a solar analyst at Bloomberg New Energy Finance. “A tariff lasting only four years and ratcheting down quickly is unlikely to attract any manufacturing investment that was not going to occur anyway.”
Instead, other solar energy users — everyone from utilities with acres of solar arrays and homeowners with a few panels on their roofs — could see costs creep up as imported panels become more expensive.
Free-trade conservatives are worried about the precedent the president has set. Between 1974 and 2016, presidents have put up trade barriers in only 19 of the 40 cases the ITC placed before them, according to the Peterson Institute.
Now, manufacturers in other industries may petition the ITC.
“There’s a real chance that this opens the floodgates,” Chad Bown, a trade expert at the Peterson Institute, told The Washington Post's David J. Lynch.
After Trump reportedly told senior staff to “bring me some tariffs” in August, “I was kind of tipped off here that this was going to be the first case the president had to use his discretion to impose tariffs,” Clark Packard, trade policy counsel at the R Street Institute, said at the Heritage Foundation event.
Compounding the concern among conservatives is that free-trade groups made an honest-to-goodness effort to change the president’s mind.
In October, 10 groups, including ALEC, R Street and the Competitive Enterprise Institute, wrote to Trump to ask him to reject solar tariffs. Jason Saine, a Republican state representative in North Carolina and ALEC’s national chairman, followed up with a letter this month arguing “[i]t is important to conservatives across the country to make sure that our trade is free and fair.”
In the past five months, the Wall Street Journal’s editorial board wrote twice in opposition to the tariffs. The solar industry even recruited one of Trump’s favorite Fox News personalities, Sean Hannity, to do a voice-over for a radio spot that ran in South Carolina during the president's trip there in October.
Though the ultimate tariff was not as bad as some solar companies feared, all that lobbying fell on deaf ears.
Now, free-trade advocates are worried about the tariff reviving not domestic panel manufacturing, but lobbying for more solar tax credits.
“If we upend this by artificially raising prices with trade protectionism,” R Street’s Packard said, “the calls for more domestic subsidies will certainly increase.”
Yesterday, Gary Cohn, Trump’s top economic adviser, found himself defending his boss’s decision during the White House press brieging. “The president made a ruling that will make the U.S. competitive and grow our economy,” he said.
Cohn said that Trump allowed an “enormous amount of latitude” in the solar panel decision, the full details of which have not been announced.
“We’re protecting our panel makers because we do make panels here in the U.S.,” he added.
One place where there did not appear to be much lamenting was among Republicans in Congress. Sen. Ben Sasse (R-Neb.), who is often critical of Trump, was one of the few to issue a statement against the solar decision.
“Here's something Republicans used to understand: Tariffs are taxes on families,” Sasse said. “Moms and dads shopping on a budget for a new washing machine will pay for this — not big companies. You don't fix eight years of bad energy policy with bad trade policy.”
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More Trump tariff fallout:
- The Post’s David J. Lynch explains why the tariffs will save some jobs, but destroy others.
- CNN’s Nathaniel Meyersohn reports on the solar industry’s warning that thousands of jobs will be lost over the move“including existing and future jobs that would have been created.”
- From New York Magazine’s Jonathan Chait: “Analysts expect that the tariffs will create negligible American jobs in solar-panel manufacturing. Turning the clock back on solar adoption by about two years is not going to do much to save coal or prevent the continued spread of clean energy. Like many of his attacks on the Obama legacy, he is throwing sand in the gears of operations that he cannot stop.”
- In Davos, Switzerland, Nobel laureate Joseph Stiglitz said the move is “bad for the global environment, it’s bad for the American economy, it’s bad for jobs in the United States,” per Bloomberg News.
The New York Times’s Ana Swanson and Brad Plumer report on a cloudy future for workers on solar farms across North Carolina.
— Pre-Pruitt hearing huddle: Former EPA officials met with Sen. Edward J. Markey (D-Mass.) and other Senate Democrats on the Environment and Public Works Committee (with reporters in tow) ahead of EPA chief Scott Pruitt's hearing on the Hill. "It's clear the EPA is not the agency it once was," Markey told the group of former federal workers, before pressing them for questions to ask Pruitt. The EPA chief is set to testify before lawmakers on Jan. 30.
— Meanwhile at the EPA: Michael Dourson, who withdrew his name from consideration to lead the EPA’s Chemical Safety Office after a troubled bid, is leaving the agency. Dourson was hired to serve as a senior adviser to Pruitt last October, but plans to leave his EPA post in the coming weeks, per the Hill.
— Pruitt’s Superfund approach flips the script: The EPA chief’s aggressive stance on Superfund cleanups are at odds with his otherwise more friendly moves on behalf of industry during his first year in office.
“In pressing for aggressive, accelerated cleanups, he is butting heads with companies while siding at times with local environmental groups. His supporters, and Pruitt himself, say it is evidence he is reinvigorating a core function of the agency. His critics see it as a political move, an effort to protect himself against charges that he constantly favors corporate interests,” The Post’s Juliet Eilperin and Brady Dennis write.
"Yet Pruitt’s attention is shifting the conversation in some beleaguered communities. Residents say they don’t care what his motivations are — if those bring the results they’ve long sought," my colleagues write. “Scott Pruitt is probably the most important person right now in the lives of the people in this community,” said Dawn Chapman, who lives with her husband and three children near a controversial site northwest of St. Louis" where a cleanup of Westlake landfill, filled with thousands of tons of radioactive waste from the Manhattan Project, is occurring,
— Pruitt’s plan to visit an ultra-efficient coal plant, scrapped: Pruitt was headed to visit a plant in Japan said to be the world’s most efficient (and perhaps attractive) coal-fired power producer, but changed plans after the government shutdown. “It could be a country club,” David Mohler, a former Obama administration Energy Department official, told E&E News. Pruitt’s scheduled visit is the latest example of the administration’s support for fossil fuels abroad.
— Scientists sue Pruitt: The Union of Concerned Scientists have decided to sue the EPA chier after releasing a report last week detailing the extent to which Pruitt and other Trump agency heads have sidelined scientific advisory boards.Their main beef: He banned those who have received EPA grants from serving on the boards.
— FERC to Congress: We would have been okay without coal during the last cold spell. Answering a question from Sen. Joe Manchin III, Democrat of coal-rich West Virginia, during a Senate Energy and Natural Resources Committee hearing Wednesday, Federal Energy Regulatory Commission head Kevin McIntyre said "we wouldn't have seen any widespread outages absent coal" in this winter's cold snap. McIntyre then added that he, like Manchin, still supports an all-of-the-above energy policy.
— Zinke’s Sunshine State burn: Here’s Interior Secretary Ryan Zinke’s latest defense of his decision to exempt Florida -- and so far, just Florida -- from the Interior Department's offshore oil and gas leasing plan. "The coastal currents are different, the layout of where the geology is," Zinke told CNN. "In the case of Florida, the governor asked first for an immediate meeting and every member on both sides of the aisle contacted my office, wrote letters on it. So Florida is unique." Zinke added he is meeting with every governor personally.
— More sexual harassment at Interior: This time at one of its most iconic parks. Interior's inspector general reported Wednesday a Grand Canyon manager sexually harassed an intern. It's a deep and disturbing trend at the Park Service that predates the Trump administration and that Zinke has vowed "action" on.
— The offshore oil plan in pictures: The New York Times has a good interactive showing the difference in size between waters the Trump administration is planning to open to offshore oil and gas drilling verses the waters opened under the Obama and George W. Bush administrations.
— "I damn near got eaten by a grizzly bear:" Rep. Don Young (R-Alaska) regales E&E News reporter Hannah Northey with a story about the time he nearly got eaten by a grizzly bear, he said, in a superb Q&A published Tuesday. "It was my fault. I had shot a caribou. This is not a good story. I had been drinking and learned a lesson through that experience not to drink again in the woods."
— What does a 620 ton boulder have to do with climate change? A rock as massive as 90 large African elephants moved several meters on Ireland’s Inishmore island in the winter of 2013-2014 after it was hammered by powerful coastal storm waves, researchers say. The Post’s Chris Mooney reports “the real question raised by the work is what it says about the future of climate change. If seas rise and storms worsen with a changing climate — as some predict — then understanding the damage that can be wrought by battering waves will be important.”
— Fighting climate change? We’re not even landing a punch: The Times's Eduardo Porter has a worthwhile column Tuesday arguing "diplomats, policymakers and environmentalists trying to slow climate change still cannot cope with its unforgiving math. They are, instead, trying to ignore it. And that will definitely not work."
— Sierra Club to Ford: Cut ties to Trump. In a new video, the 126-year-old environmental organization asked the 115-year-old car company to stop working with Trump to lower environmental standards. "Ford’s claims of sustainability in its advertising and here at the auto show are nothing more than greenwashing," said the group's deputy legislative director, per The Hill.
- The Senate Commerce Committee holds a field hearing on “Driving Automotive Innovation and Federal Policies.”
- ACORE and Bloomberg New Energy Finance holds a webinar on renewable energy financing.
- Politico holds an event on “Driverless Cars: Who’s Making Sure They’re Safe” on Thursday.
- Wilson Center holds a discussion on “A World Without NAFTA?” on Thursday.
- The American Wind Energy Association holds its Southeast Wind Conference in Atlanta, Ga. on Thursday.
- Brookings Institution holds a live webcast with OIRA administrator Neomi Rao on “What’s next for Trump’s regulatory agenda” on Friday.
- The Society of Environmental Journalists, George Mason University and the Wilson Center host an event to launch the annual report on: “The Journalists' Guide to Energy and Environment" on Friday.
- EPA chief Scott Pruitt is scheduled to testify before the Senate Environment and Public Works Committee on Jan. 30.
- FERC Commissioner Neil Chatterjee is scheduled to speak at the 31st annual Power and Gas M&A Symposium on Feb. 1.
A super blue blood moon that coincides with a lunar eclipse will rise on Jan. 31. The last time that happened was in 1886: