Trump's solar tariff confusion creates an opportunity
One would think that these two would effortlessly win the support of their local sector players, competitors and all. But this is not what happened. What did happen was exactly the opposite: the Solar Energy Industries Association came down on Suniva and SolarWorld like a ton of bricks, claiming that tariffs and floor prices would be a stab in the chest for the U.S. solar industry, leading to project cancellations worth billions of dollars and massive layoffs, to the tune of a third of the total number currently employed in the industry.
Yet it's easy to see why the ruling resonated with traders. Tariffs and floor prices are, after all, protective measures aimed—on the face of it—at protecting U.S. solar businesses from cheap imports. The problem is that sometimes, as in the Suniva/SolarWorld case, this is a dangerous oversimplification.
Contrary to what the plaintiffs in the case were claiming, there was no “flooding” of any sort, according to the solar industry association in response to the court ruling. What Chinese exporters did was merely provide U.S. solar installations builders with the necessary materials—namely, cells and modules. In fact, the SEIA said, the plaintiffs were trying to blame Chinese cell and module makers for their own failure to turn in a profit because their products were subpar, while the Chinese suppliers were simply filling a critical gap amid booming demand for utility-scale solar installations.
The shares of utility-scale solar companies saw obvious effects of the investigation and the consequent ruling—chief among these: First Solar's stock.
First Solar (NYSE:FSLR)
The country's largest solar panel manufacturer's shares added a stunning78 % between the end of March and last week, hitting US$51.99 on September 22, the day of the ruling.
That was the highest price for the stock for the past 12 months.
On Monday, First Solar's stock reversed to US$46.88 as investors started to wrap their heads around the actual implications of the ITC ruling. As of late-morning trading on Tuesday, FSLR was at $46.44, down 0.94 % on the day and down over 5 % on the week.