 is Stink Tech, Hawaii. Community matters here. Aloha. This is Monday. Aloha from Mina, Marco and me. And today, as you can see, it's not Jay, but it's Sharon Moriwaki, co-chair of the Hawaii Energy Policy Forum, co-hosting with Mina Morita, also co-hosting, as well as being our guest, as usual. And we have Marco from the Big Island, from Provision Solar. Marco, say hello. Say hello, Marco. Namaste. Happy Aloha Monday. Welcome, and Aloha. So, today we have an interesting discussion on the International Trade Commission decision last Friday that I'm going to ask Mina to tell us more about and what the implications are of that decision. Mina? Yeah, I guess on Friday there was a huge ruling by the U.S. International Trade Commission, where they voted 4-0 to find cause that the importation of crystalline silicon PV modules had an unfair import, these imported modules had an unfair, unfairly disadvantaged to domestic companies. Those two companies that filed the ruling was Geneva and Solar World, but what I find really interesting is these aren't U.S. companies. These are, I think, a Chinese company. Is that a Chinese company? Singapore? Oh, Singapore. And a German company manufacturing in the U.S., but Marco, I know this just creates more uncertainty in the solar industry as I think over 90% of panel modules are imported, so can you give us your take on it? Sure. I mean, the kind of taking a big step back here as I've been teaching my students in my energy apologies class over the years, there ain't no such thing as a level playing field in energy, and there never will be. There's just too much at stake, there's too much money, there's too much in terms of political power and influence at stake in the energy arena, so it really comes down to if you buy my premise of the energy field, never going to be even, there are going to be some who are going to be supported more than others. And over the past six years now, Solar World, which is based in Germany, has been leading the charge against the importation of cheaper foreign imports coming into the U.S. They have had a facility in Hillsborough, Oregon for Solar World America that has been manufacturing product there over the past years. And they, as long as well as others, in this case, Sun Eva, like you said, Mina, based in Georgia, however majority owned by a Chinese company by the name of Sean Fong, based in Hong Kong, that the attempts, they've made attempts over the past five, six years to try to penalize in terms of increased import duties and tariffs, solar modules coming into the U.S. from outside the U.S. The overall trend line over the past years has been remarkable in terms of the price of PV modules has come down very dramatically. I mean, it wasn't that long ago when I was paying four dollars or so per watt for photo will take modules. And now the average selling price is probably somewhere in the 40 to 50 cents a watt range. So it's come down by 90 percent or so 80, 90 percent. So I think, sorry, Marco, I think Department of Energy announced that their SunShop targets were achieved, was it their 2020 targets were achieved in reducing costs. And that was an announcement that just came out recently, like last week, too. So, yeah, I think with, you know, definitely, that's a great indication that that prices were dropping. So I'm sorry, Marco, go ahead. Well, it's become all but impossible for a module maker or a module assembler or module assembler to make a go of things in the U.S. If you look at a map of the U.S. that the solar world prepared and presented to the Commission, the ITC, when there was the public hearings on it a month or so five, six weeks ago, it was a graphic indication of all the solar assemblers in the United States who had gone out of business over the years. So it's hard to make a case that assembling solar modules in the U.S. is sustainably profitable. That said, Solar World and Suniva brought this complaint to the ITC and the ITC, like you said, being a voted for to nothing, essentially supporting Suniva and Solar World's position. What's thought to me is that there are six members of that body, six members of the Commission, and I don't know why two of them decided not to vote, but be that as it may, they voted for to nothing in favor of the complainants. And then the next step is for them to come up with a quote remedy, which there'll be another hearing hearing from the parties on both sides in terms of what such a remedy should look like, the remedy being a tariff placed on solar modules coming from outside the U.S. And then whatever remedy that the ITC decides on will be forwarded to President Trump for his ultimate decision on what to do about the recommendations of the remedy or remedies that are proposed to him. Interestingly, in the decision from the ITC, they noted that a number of companies, a number of countries in terms of modules possibly produced or solar cells produced in these countries will apparently be outside or exempt from any type of remedy or tariffs, including places like Australia, Peru, Columbia, and Singapore. So most likely many other countries, Chinese mainland, Taiwan, Malaysia, Vietnam, and so forth will will be affected. But apparently some countries such as REC, which is a solar company based in Norway, but they produce solar modules in Singapore. So it would appear at least the first glance, there will be some some of these countries that will be spared the the imposition of tariffs. Now what it's going to mean to us here in Hawaii, both as solar contractors and customers or homeowners and business owners who still want to go with with installing solar PV is a likely increase in the overall cost of the system. But none of us are able to be able to foretell what that increase will be because it's still very much the game is still very much afoot. So the actual impacts on us collectively still remain to be seen, but it's certainly unwelcome information or unwelcome decision on the part of the ITC's part. And there was a lot of heavy lobbying on both sides, but ultimately, the folks at SunEvent Solar World prevailed. So so, Marco, just in terms of process, is there such a thing as an appeal of the decision? Or is that a done deal? And, you know, it just goes forward. If you say that there's so many people that are going to it's going to negative impact having more solar on roofs and actually getting to our goals and renewable, sustainable energy for the nation. Is there any way for an appeal from folks who do the installing? That's a great question, Sharon. And I'm not enough of an expert on the ITC International Trade Commission to be able to give you a definitive answer. There could be an appeal kind of on procedural grounds, perhaps, but I mean, it seems to me, and I haven't read any analysis, even mentioning the possibility of an appeal. Often is the case that the Department of US Department of Commerce will come up with a decision imposing a tariff or some type of fee on imported goods coming into the US, and then the ITC actually acts as kind of the court of appeals. But when the ITC essentially fast tracks the decision like they did with this one, in other words, it didn't go to the US Department of Commerce first, but went directly to the ITC. As far as I know, there's no other body above it, other than the president, who will make the ultimate decision as to what degree of remedy is imposed on imported or importers of solar modules. And one of kind of interesting thing that the complainant asked for was essentially what referred to as global safeguard protection, global safeguard protection. What does that mean? It's part of the, I'm just reading the decision here, Section 202 of the Trade Act of 1974. And that means that these particular parties and even Solar World were wanting and asking for protection against the importation of any and all solar modules coming from outside the US, whether it's coming from our friends in Canada or Mexico or anywhere that's outside US territory, and that's about as broad and deep protection as you could possibly ask for. But the commission decided not to agree to global safeguard protection across the board, but like I said earlier, carve out a number of countries in the so-called free trade agreement countries that would likely be exempt from duties for solar modules coming in from these countries. So I guess in today's utility dive, talking about going back to the question about process, it indicated in that article that there would have to be a procedural defect in order for the ITC to take up an appeal that it's nothing of the substance, the decision itself, it would be procedural. The other thing is this is such a complex issue and it's made a lot of strange bedfellows, like for example, the Solar Energy Industry Association is aligned with Duke Utility and also the Heritage Foundation and also the Alec, the American Legislative Exchange Council, which are extremely conservative groups. And then like I said, the two companies that filed petitions to NEVA and Solar World are not U.S. companies or owned by U.S. interests. They're actually foreign companies doing business. So could that be a procedural error in a sense that you're really protecting the interests of the United States? And here you have the two, I guess you call them petitioners or plaintiffs or whatever you call them. They're the ones coming in who are foreign. I don't think so. I mean, basically, you know, all they're talking about is domestic manufacturing. So it doesn't matter who does the manufacturing. It's domestic. And so, yeah, you have these strange bedfellows. And then, you know, is this playing into a president's rhetoric of, you know, slapping on tariffs, you know, that whole thing about importation and, you know, the tariff and also the floor price that's being requested by these companies is pretty sizable. Correct me if I'm wrong, but I read, Marco, I read that the tariff they're seeking is 40 cents a watt, and the floor price that they're seeking is 78 cents a watt. That's what my understanding is, well, I mean, they were seeking a minimum import price of 78 cents a watt, which, like I mentioned earlier, if the average price right these days is somewhere in the 40 to 50 cents a watt range that certainly is substantial increase in a sense per watt basis for solar modules. And I agree. I mean, the irony of having companies that are completely owned, wholly owned or majority owned by outside companies based in places like Germany and China, I'm sure that was pointed out in the arguments made by our side, by the solar party side, or by the other folks who were opposed to Suniva and Solar Worlds Complaint. That was made abundantly clear, I'm sure, in their oral and written arguments to the ITC, but that didn't didn't apparently hold any sway or enough sway. Well, the biggest losers in this is the consumer, as usual, increased prices. So what do you think to port 10 going forward, Marco? If it is double the price that the floor is going to be with this decision, what does that mean for the solar industry here in Hawaii, and for a consumer? Because we can see that higher prices are going to mean less usage and installation, perhaps. I think the price per watt, the install price per watt of PV systems certainly would be affected and go up with a higher import price or import tariff. There's no doubt about that. But in the grand scheme of things, I think those of us in the industry here have just as important, if not bigger concerns on our minds these days in terms of tariff or interconnected agreement options that are in flux right now for those homeowners and business owners who still want to go solar who have yet to do so, solar electric. The parties on the distributed energy resources docket or the dirt docket, along with the commission are all working hard to try to come up with something in the weeks and months to come as the customer grid supply program sunsets and less than a month from now in October 21st. So in a sense, this decision from last Friday kind of adds insult to injury and the injury being or the injuries being that we're already in a very difficult situation with fewer sales with fewer interconnect options with more and more circuits across the island's utilities. Hiko, Helco, Miko and KI you see more and more circuits that are essentially heavily saturated or penetrated by existing rooftop solar. So it's a combination of a number of things that lead to a very challenging time to be in the solar business and just kind of FYI of the top 10 solar electric providers here in this island over the past several years, well, 2015, 2016, of those top 10 of which my company is one of them, of the top 10, five of them have either left the island, left the state, dramatically downsized to the point of doing very little solar electric or actually filed for bankruptcy protection. So the attrition rate right now is very high. And certainly to me kind of brings up the broader question of just how valuable is having a viable healthy solar electric industry here in terms of being able to do rooftop solar. And that's that's a question that, you know, I have an opinion on others do, but it's the kind of the rubber saying the road, so to speak, in terms of where do we collectively go from here with so much in the air up in the air. Okay, so I think the other big news that came up last week was solar city resolving with the US Treasury Department it the allegation of false claims act violations where solar city allegedly submitted in inflated claims on behalf of itself and affiliated investment funds to the US Treasury. And this has a lot to do with our grants that were allocated in 2009 and just unsetted at the end of December 2016. So apparently, solar city overstated costs and agreed to pay $29.5 billion back to the US Treasury. So any insight on that, Marco? Well, their decision was a while and coming. Mina, I know this investigation has been going on for years. The Treasury is also investigating other solar finance companies, including Sun Run, if I'm not mistaken, as well. And in terms of number one and number two in the country, solar city has been number one in Sun Run number two. So I expect another shoe to fall essentially with some type of determination regarding Sun Run, perhaps not in the too far distant future. But like you said, the allegation was that solar world violated the false claims act by inflating the amount of money they said they were claiming in the grant program, the rebate program under section 1603 of the Ara American Recovery and Reinvestment Act of 2009. And interestingly, in reading the press release from the US Department of Justice, this is one of those situations where a large corporation agrees to pony up a substantial amount of money to an I $29.5 million. But they explicitly determine or explicitly say that there's no they don't they don't accept any liability. You know, they were they're willing to pay the money to quote resolve allegations without admitting guilt. So I've had some feedback from some friends of mine who know this stuff a lot more than I do in terms of the ins and outs of these kind of actions. And the belief is that solar city probably got off quite easy by paying $29.5 million compared to the amount that was alleged by by the investigators, in terms of just how much money Solar City made by inflating their their cost to be able to take advantage of this of this rebate program. So the point being is the 29.5 million sounds like a lot of money. But it probably is a very relatively small sum compared to what they were alleged to have profited by inflating their their numbers. So imagine that these these settlements, they don't actually tell you what they inflated. So it's just a settlement. So it's a wash. Nobody I mean, is that just sort of none of that information is out to the public to be aware of? You know, I'm not sure how I'm not sure how much of it is public information. I guess you could get an inkling of the amount for on the initial charges, what they're charged with. But Marco, how does this affect lease systems? So does it translate to the cost of these lease systems are also inflated? That's a good question. I mean, I really don't know. I don't see how, you know, a lease agreement between Solar City and homeowners is a is a contract is a legal contract. I don't see how they could go back retroactively and say we need to make an adjustment. But again, that's subject to lawyers. And I don't I don't have the actual agreements. I'm not privy to them. So I really don't know. Well, I think, yeah, I think that's really interesting. Because again, you know, it's a settlement admitting no liability if they had if they were held culpable for these kinds of actions, I would think that, you know, there would be some recourse in reexamining these lease agreements. So yeah, that would be interesting, because, you know, I don't believe we're talking just about utility scale projects, but any type of installation was eligible for these grants. Well, it would be good to know what the claims were then. In fact, if customers were really damaged by it, I mean, that they were paying overpaying for systems that they bought well. Yeah, they don't I don't believe they distinguish between utility systems or owner owned systems, just that these systems were installed, and they were eligible for these grants. Well, I'm just looking at the last line of the press release from Treasury on Friday, our Department of Justice and quote the claims resolved by the settlement agreement are allegations only. And there has been no determination of liability. Yeah, he sent in. Okay, I guess we're getting close to the hour. Are we robbed? So I just wanted to see whether there was any last words on what it is for the industry for our consumers with the decision from the ITC, the International Trade Commission, as well as these kinds of over over, I guess rated contracts that that the industry representatives actually do. Is there anything that we can look at for a policy perspective or consumer beware perspective? What can we tell the listening audience? There's just a lot of turbulence right now, Fina, and I think in the industry and amongst the buying public, and a lot of uncertainty and and hard to thrive in an environment in a sales environment that has so many important things up in the air like we're dealing with right now. I think it's one of the fallouts from exponential growth. And then the industry trying to write itself. And then also the challenge of the integration of these kinds of systems into the grid in general. Again, there's still 75% of utility customers that are not being served by any type of rooftop system. And so, you know, the larger question is, how do we develop systems where everybody can benefit from from from renewable systems, affordability, accessibility? So is there anything a little more positive the future, other than uncertainty, uncertainty? What what can we kind of work toward to reduce the uncertainty, whether on a state level or a county level or industry level or people level, what could we sort of work on toward that? Oh, I mean, the issues that need to be worked on are really, really tough issues. Highly technical and a lot of cost issues in making sure that we have the correct rate designs to incentivize keep incentivizing the import from from these systems or exports or exports from these systems to the grid that they're fairly priced and again, beneficial to the system. And like I said earlier, these are really technical complex issues that need to be worked through. But I think one of the things that maybe for the next time, really taking a hard look on has has solar rooftop solar contributed to resiliency and covering from these huge disasters in in Texas, Florida and the Caribbean. That's a really important topic. And I hope that you can cover that. I think we're getting close to the hour. But if you can cover that next time as to how solar rooftop can can help us and how might we be more resilient with solar to withstand hurricanes and if God for now, I mean, I think everybody's looking at cat two storms. But now I mean, really, we need to prepare for cat four and cat five storms. So, Marko, any closing thoughts, closing comments? Yeah, I agree with with you all this having battery storage, I think it's a very timely and critical discussion to have, especially in light place like Puerto Rico, which has been hit now by one by two hurricanes. And I've seen us to miss anywhere between six to 12 months before the power grid comes close to being fully restored six to 12 months. I mean, imagine if that were to be the situation on one of our islands, let alone the whole state. So I think it urges a discussion about whether the time for battery backup for on an individual basis. In other words, homeowners getting their own Tesla powerwall or some other comparable product is something that's now or should be considered to be an insurance policy like we pay for our home and for our life and our car and our other possessions is an insurance policy to have backup power if the grid goes down or is hit to be able to provide that to homeowners. So I think that's another very interesting discussion that we could have. And do you want to summarize Mina have today's show and looking forward to next week's show? No, just, you know, I think within 72 hours, we've created much more uncertainty for the solar sector, not only in Hawaii, but throughout the country. Okay, great. Thank you, Mark Cole from the Big Island and Mina for edifying us and keeping us on track with the happenings on the federal level and how it impacts us in Hawaii. So mahalo aloha. Thank you, Sharon. Thanks for stepping in. Thank you very much, guys. Always a pleasure. Thank you. Bye bye.