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At a private reception with Chinese government officials, China-based companies and FDI agencies, the Greater Phoenix Economic Council (GPEC) announced it has filed a strongly-worded letter to the US Department of Commerce and the International Trade Commission (ITC) protesting against the tariffs on Chinese-manufactured photovoltaic cells and modules. Currently, GPEC is the only economic development organization in the country to come forward against the US ruling.
In the letter, GPEC provides a variety of reasons for its stance, predominantly the economic effect on the state.
Commissioned by CASE at the beginning of this year, the Brattle Group released a report estimating that a solar tariff of 50% would result in job losses between 14,877 and 43,178 in 2014. With a 100% tariff in place, the loss of jobs is estimated to be between 16,917 and 49,589 jobs in 2014.
“With such a significant projected national job loss and with Arizona ranked third in the nation for solar installation capacity, we have no doubt the tariff will not only cause solar companies to alter their business models, but also make future Chinese investment in Arizona more challenging,” GPEC president and CEO Barry Broome said. “This impacts one of our most promising local industries – an industry that’s thriving and that leaders in our state have worked diligently to foster.”
GPEC president and CEO Barry Broome has voiced his concerns about the ruling since SolarWorld initiated the proceedings last year. “Solar is a either a good thing or it isn’t,” he said. “You are for solar or against it.”
As keynote speaker at PV Power Plants Conference USA 2011, Broome said he saw the sector as “intercompetitive” and “interpolarized,” with a tendency toward “carving itself up” instead of “talking up the upside” of solar. He emphasized that the industry has to “sell the technology as universally good, regardless of internal differences.”
In the letter to the Department of Commerce, GPEC cites the case brought by GCL-Poly Energy Holdings and Daqo New Energy to the Chinese Ministry of Commerce, that “Retaliatory tactics that pose barriers to free trade are not limited to the US and China but threaten global trade of solar goods. The growing trend of protectionism and anti-free market policies in the solar trade make it even more difficult for solar energy to compete with fossil fuels.”
GPEC also states that foreign direct investment from China would be adversely affected with the US losing out on almost US$1 trillion by 2020. The negativity from the US towards China is affirmed due to the disproportionate share of US FDI in China. “Commerce’s tariff ruling is well publicized in China and reaffirms the message that the US does not welcome Chinese investments. This perception could lead to missed opportunities for the US.”
Over a dozen Chinese companies have provided an investment in Greater Phoenix totalling approximately US$400 million. GPEC claims that in Arizona, approximately 9,128 direct jobs are associated with renewable energy companies and utility-scale projects.
The letter concludes with, “Utilizing tariffs to compensate for diminishing support for the industry is an unfavourable and protectionist approach that will only obstruct the industry’s growth potential.”
“Imposing tariffs creates a loss for everyone, including small cities like ours,” City of Goodyear Mayor Georgia Lord said. “It slows innovation and diminishes the effort we’re all making to cultivate jobs.”
On the heels of filing a formal letter of protest, GPEC also plans to testify before the ITC at its official hearing of this investigation on October 3, 2012.