You May Have Heard of the Tariff on Solar that was approved by President Trump in January. It’s a four-year tariff program on imported solar cells and modules (solar panels), declaring an intention to provide relief for U.S. manufacturers against what they perceive as unfair trade practices. Based on a petition from manufacturers Suniva and SolarWorld Americas in mid-2017, the International Trade Commission (ITC) determined that increased solar cell and module imports “are a substantial cause of serious injury to the domestic industry.”
The tariff recommended to the President was adopted; 30% added to solar cells and panels that are imported into the U.S., with a 2.5GW (gigawatt) allowance each year for tariff-free cells. This is far less than what the petitioners were asking. The tariff is expected to take effect February 7th this year. U.S. solar projects used about 2GW of panels last year. Thanks to Green Tech Media for reporting on this subject (in italics).
Washington panel manufacturer Itek Energy in Bellingham is confident that their pricing will remain at 2017 levels. This bodes well for our customers who prefer to ‘buy Washington’.
While installations are expected to drop by about 11 percent nationally, California, Delaware and North Carolina should only see modest declines of 7 percent. Texas is only slightly above average, with losses coming in at 13 percent.
In the State of Washington the effect is expected to be small and possibly only on utility-scale projects.
“I know of no project, at this point, that is not going to be built because of the tariffs,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association. ”People are scrappy, and they can come up with ways to get the job done.” At the other end of the spectrum, Montana’s solar market is predicted to plummet by nearly 50 percent. “Montana is going to be creamed because Montana, as a state, doesn’t do anything to drive renewable energy,” said Del Chiaro.
The reason for the dramatic differences between states can be attributed to regional market size and local renewable energy policies. New and emerging state solar markets are disproportionately affected by the tariffs, with Southern states like Texas, Florida and South Carolina among the most significantly impacted. States with strong renewable portfolio standards are among the least sensitive to the trade measures.
Washington has in-state manufacturing and an incentive program that offsets 50% of project costs. The State Energy Code includes solar as an efficiency measure, and the Seattle Energy Code requires solar on all new commercial buildings.
“I don’t think it’s going to be nearly as bad as folks think it’s going to be,” predicted Scot Arey, owner of Solar CenTex, a small-scale installer in central Texas. “If Texas electricity prices start rising, and I think they will, then residential installers are going to be just fine.”
Utility rates are increasing and that will increase the value of solar kilowatt hours.
Based on precedent from previous Section 201 trade cases, U.S. trading partners are expected to mount a challenge to the new tariffs at the World Trade Organization in the coming months. Some companies are asking for exceptions. Stay tuned for additional news.
