Share This Post

Featured News / Featured Slider / Main Slider / Politics / Science / Top News

Trump Taxes Solar Imports in Biggest Blow to Renewables Yet

Trump Taxes Solar Imports in Biggest Blow to Renewables Yet

President Donald Trump’s tariffs on imported solar panels mark the biggest blow he’s dealt to the renewable energy industry yet.

The U.S. will impose duties of as much as 30 percent on solar equipment made abroad, a move that threatens to handicap a $28 billion industry that relies on parts made abroad for 80 percent of its supply. Just the mere threat of tariffs has shaken solar developers in recent months, with some hoarding panels and others stalling projects in anticipation of higher costs. The Solar Energy Industries Association has projected tens of thousands of job losses in a sector that employed 260,000.

The tariffs are just the latest action Trump has taken that undermine the economics of renewable energy. The administration has already decided to pull the U.S. out of the international Paris climate agreement, rolled back Obama-era regulations on power plant-emissions and passed sweeping tax reforms that constrained financing for solar and wind. The import taxes, however, will prove to be the most targeted strike on the industry yet.

“Developers may have to walk away from their projects,” said Hugh Bromley, a New York-based analyst at Bloomberg New Energy Finance. “Some rooftop solar companies may have to pull out” of some states.

Solar Surges

U.S. panel maker First Solar Inc. jumped 9 percent to $75.20 in after-hours trading in New York. The Tempe, Arizona-based manufacturer stands to gain as costs for competing, foreign panels rise. First Solar didn’t immediately respond to a request for comment. The Solar Energy Industries Association estimated that the decision will eliminate about 23,000 U.S. jobs this year and delay or kill billions of dollars of solar investments.

Trump approved four years of tariffs that start at 30 percent in the first year and gradually drop to 15 percent. The first 2.5 gigawatts of imported solar cells are exempt for each year, the president said in an emailed statement.

The duties are lower than the 35 percent rate the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers. The idea behind the tariffs is to raise the costs of cheap imports, particularly from Asia, and level the playing field for those who manufacture the parts domestically.

American solar installers including SunPower Corp., Vivint Solar Inc. and Sunrun Inc. jumped in after-hours trading. “A 30 percent tariff in Year One is bad,” said Gordon Johnson, a New York-based analyst at the Vertical Group, but “it’s less than what the consensus was.”

Jigar Shah, co-founder of investor Generate Capital Inc. and an outspoken advocate for the solar industry, went as far as to describe the decision as “good news.” The tariffs are “exactly what the solar industry asked for behind closed doors” to prevent a negative impact on companies, he said.

Sunrun said in a statement that, while the decision lifts “a cloud of uncertainty,” it still runs counter to “consumers, bipartisan elected officials, many military personnel, and the 99 percent of American solar workers whom this tariff will harm in the coming years.” The San Francisco-based company called for the administration to clarify which countries won’t be subject to the tariff. Trump didn’t identify exemptions in his statement.

Not Deterred

Rooftop solar installer Sunnova Energy Corp. said the tariffs will not deter the industry. “The solar industry has been tested before and we have always shown our resiliency,” Sunnova Chief Executive Officer John Berger said in a statement. Regardless of the tariffs, solar installer Tesla Inc. said it’s “committed to expanding its domestic manufacturing,” citing the “gigafactory” it opened in Buffalo, New York.

The duties won’t be entirely devastating for the U.S. solar industry, Bromley said, estimating that they’ll increase costs for large solar farms by less than 10 percent. The costs of a residential system, he said, will rise by about 3 percent.

The decision will “destruct some demand for new projects in the next two years,” Bromley said. “But they will likely prove insufficient in magnitude and duration to attract many new factories.”

Share This Post

Leave a Reply