Several solar power stocks, especially First Solar (FSLR), are sliding after the International Trade Commission announced three different recommendations for restricting U.S. solar panel imports. Commenting on the news, FBR Capital analyst Carter Driscoll told investors that less onerous than expected ITC remedies may weigh on First Solar.
ITC PROPOSED REMEDIES: Members of the U.S. ITC made three different recommendations for restricting U.S. solar panel imports, giving President Donald Trump a range of choices to address injury to domestic producers, according to Reuters. The recommendations range from an immediate 35% tariff on all imported assembled solar modules to a 4-year quota system that allows the import of up to 8.9 gigawatts of solar cells and modules in the first year, the publication added. President Trump is expected to make a decision by early next year in the “global safeguard” case that could significantly restrict imports and affect the price of solar power, Reuters noted.
IMPACT ON FIRST SOLAR: After the ITC delivered proposed remedies for the solar 201 trade case with the plurality recommendation calling for 30% tariff on imported solar cells above 1GW and 30% tariff on solar modules over a 4-year period, FBR’s Driscoll told investors that he believes the plurality recommendation becomes the leading proposal that President Trump will begin to consider, potentially going into effect in January 2018. However, if Trump pursues an alternative case, or pursues his own under the broad discretion provided by Section 201, any remedy decisions would likely be delayed until April 2018 with the possibility of Congressional action to override the President’s recommendation, he contended. The analyst pointed out that he expects First Solar, which he believes would have been the main beneficiary of a more onerous structure, to sell off. Upstream and downstream solar players “should be able to live with this recommendation,” if enacted, he added.