The Public Interest in Solar Imports

Sun and Power Lines

Prior to instituting a Section 337 investigation into imports of Photovoltaic Cells and Products Containing the Same (Inv. 1151), the ITC received an inordinately high number of submissions related to the public interest.  So far, comments have been filed by nineteen non-parties concerned about the broad harm an exclusion order would cause to the solar industry.

The complaint was filed on March 4 by Hanwha, a Korean multinational conglomerate, alleging infringement of one patent covering a particular configuration of a solar cell.  The respondents are two Chinese companies (Jinko and LONGi) and one Norwegian company (REC) that import cells and modules from Malaysia and Singapore.  Hanwha imports cells and modules from Korea, but both it and respondent Jinko have opened new facilities in the United States to make some modules domestically from imported cells.  Hanwha is relying on investments in its new U.S. facility to show a domestic industry.

In most Section 337 investigations, the ITC doesn't receive any non-party submissions on the public interest.  When they do, the comments usually come from a trade association or member of Congress saying nice things about the respondent or from a downstream customer saying how much they rely on the respondent's products.

In some ways, comments in PV Cells are the same as you would expect in any other case.  For example, the commenters include the Solar Energy Industries Association, the Florida Chamber of Commerce, the City Council of Jacksonville (where Jinko's domestic facility is located), and a slew of utility providers, solar installers, and other downstream users of the accused modules.  They mostly argue that an exclusion order would reduce supply, limit choice, and raise prices.

Since that's true of every exclusion order ever enacted, the Commission (which hasn't applied the public interest test to deny an exclusion order in 35 years) is almost certain to dismiss these arguments as simply part of the accepted price paid for enforcement of patent rights.

So why is this case attracting so much more attention than your average ITC patent investigation?  As some of the comments pointed out, the solar industry is already reeling from other aggressive trade actions by the U.S. government against solar imports.  Imported solar cells and modules currently face an import duty of 30% imposed by the Trump administration in 2018.  And Chinese solar imports have been effectively blocked by additional tariffs imposed as part of the administration's trade war with China.

It should be no surprise then that solar industry players would be sensitive to uncertainty around prices, capacity, and supply chains.  It seems reasonable that the ITC could consider a further reduction in supply to be unacceptable or to find that an exclusion order would be at odds with the goals of other trade and energy policies.

Imposing additional barriers under Section 337 risks further meddling in an industry already beset by different government interventions pursuing incompatible goals.  The existing trade barriers already work against green energy policies designed to promote the use of solar energy.  And an exclusion order in the PV Cells case would run counter to the stated goals of the trade barriers by hindering new solar module manufacturing investments that rely on imported solar cells.

Photo Credit: stu