Fox File #32 "Section 201"
The Fox Files is a weekly message from EDCUtah President & CEO Theresa Foxley.
At 4:50 on Friday we received an email from a site selection consultant with a large, out-of-state firm. The consultant included an RFI for a manufacturing facility that could invest up to $1billion and create up to 3,500 jobs. A monster project by any definition and, I might add, a great way to end the work week.
But the kicker is, this is the 5th solar PV manufacturing project to enter our pipeline in 2 weeks. The 5th! We’ve probably gone 5 years without a single solar PV manufacturing project and now all of the sudden we have 5. Naturally, we wondered what is driving the sudden surge in interest.
So I called my good friend, Luigi Resta with Onyx Renewables. Luigi is the man behind the 80 MW Red Hills Renewable Park utility-scale solar plant in Iron County: the first of the utility scale solar projects to come online in Utah. I knew if anyone could help us understand what is driving the demand, it would be Luigi.
Luigi explained that the U.S. International Trade Commission recently voted to uphold a complaint brought by two U.S. solar manufacturers alleging that low-cost imports were damaging their business under what is known as a Section 201 Case under the 1974 Trade Act.
The ITC’s report has gone to President Trump’s desk, and he is required to make a decision by January 11, 2018. The President has discretion in the remedies he can impose should he uphold the ITC’s findings. Those remedies include the imposition of tariffs on imported materials. That threat of action is what is driving the sudden increase in demand for U.S. manufacturing facilities. International solar PV manufacturers are hedging against a potential tariff and they want to have a U.S. manufacturing strategy in place in the event President Trump imposes a tariff schedule. That’s why we’ve seen a sudden uptick in interest. Clearly, given our proximity to some of the largest solar markets in the country and our strengths in the manufacturing sector, we are an obvious choice for international solar PV manufacturing firms.
Because there has been a lot of political conversation related to free trade as of late we thought this example would be of interest to our stakeholders. Although this specific case has not been central to the national dialogue, it is one that could have a potential impact on Utah’s manufacturing sector. The irony is that while the Section 201 Case could create new solar PV manufacturing jobs in the U.S., many commentators believe it could harm other solar energy-related jobs as the cost to install solar would increase.
We’ll keep you posted on the status of the Section 201 case and on the projects in our pipeline.