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1 1 (November 20, 2017)

handle is hein.crs/govcgxw0001 and id is 1 raw text is: 0,;0 ,. \ ,,'x' , ,z ' ;i-',N.J::, . ., .'xx' ,,.'.,-,V ,':, mppm qq\ a ' p\w -- ' gn'a', g-o 's I 11LIANJILiN, November 20, 2017 U.S. Solar Manufacturing and Global Competition In spring 2017, two U.S. solar equipment producers petitioned the United States International Trade Commission (ITC) to consider a global safeguard on solar photovoltaic (PV) cells and modules, claiming that they were being seriously injured by increasing imports. In September 2017, the ITC unanimously agreed that certain types of PV imports were a substantial cause of serious injury to U.S. producers. In November 2017, the ITC sent the President a report recommending a combination of actions on foreign-made solar equipment. The President is to respond by January 12, 2018. He has complete discretion over the size, scope, and duration of any trade remedy, or he may opt to take no action. The President is to explain his actions and reasons to Congress in writing. The ITC ruling concerns crystalline silicon photovoltaic (CSPV) modules used to produce solar energy on the premises of many homes, businesses, and public buildings. Solar PV manufacturing does not require complex machinery and thousands of parts; most PV systems have no moving parts at all. Solar cells, the basic building blocks of a PV system, are assembled into modules, also known as panels, and modules in turn are connected to one another in arrays (see Figure 1). Solar modules are often described as a commodity, meaning they can be mass-manufactured. Large producers have a cost advantage because of economies of scale. Figure I. Solar (PV) Cell, Module, and Array Mavy ceih Mang modtdf Many* o Source: Adapted by CRS from SamlexSolar. Still, large multimillion-dollar capital investments are needed to build or upgrade a PV manufacturing facility. PV production is highly automated. Domestic module manufacturers have told the ITC that labor costs accounted for about 7% of production costs in 2016. Domestic transportation costs for finished modules produced in the United States are in the range of 2%-3% of value. The costs of materials, capital equipment, and research and development account for much of the rest. Over 1.3 million PV systems (with 14.8 gigawatts of capacity) were installed in the United States in 2016, more than four times the level of 2012. Several factors account for the growing domestic demand for PV products, including the following: * Falling cell and module prices. According to GTM Research, in 2016 module and cell prices dropped 25% and 23%, respectively. * The solar investment tax credit. The credit was set to expire in 2016, but was extended through the Consolidated Appropriations Act of 2016 (P.L. 114- 113). The credit is scheduled to be reduced from the current 30% of solar module costs to 10% for commercial projects and to 0% for residential projects in 2022. * State renewable portfolio standards. Twenty-nine states mandate an increase in the production of electricity from solar and other renewable resources. * Higher efficiency. Crystalline silicon PV modules convert, on average, 12%-22% of incoming sunlight into electricity. As efficiency has improved, PV installations have become more cost-effective relative to some other sources of electric power. Gl'obal an,',d PV Rrod.kuc'ic, n PV cell and module manufacturing is highly competitive. The United States accounted for 2% of global cell and module production in 2015, according to the International Energy Agency. By comparison, China accounted for more than two-thirds of the 63 gigawatts of worldwide module production in 2015, followed by Malaysia, South Korea, Japan, and Germany. According to one estimate, imports of solar cells and modules are expected to supply 88% of U.S. domestic demand in 2017. PV modules represented more than 90% of global PV production in 2016; the remainder involves thin-film technologies, which have a different production process. Domestic PV manufacturing has expanded in recent years. An August 2017 ITC report found that between 2012 and 2016, production capacity of U.S. PV module manufacturers rose 34%, and domestic production expanded by 24.2%. About 38,100 workers were employed in solar manufacturing in November 2016, 28% more than in 2012, according to the Solar Energy Industries Association (SEIA), an industry trade group (see Figure 2).

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