Is The U.S. Solar Boom In Jeopardy?
The U.S. solar industry has surged in recent years, accounting for the largest source of new electric capacity in the past year, with plenty of room to grow. However, the Trump administration is weighing a trade tariff that could seriously curtail the explosive growth figures for U.S. solar.
On Tuesday, the U.S. International Trade Commission (ITC) recommended a 35 percent tariff on imported solar panels in response to a complaint from a U.S.-based solar manufacturer over cheap imported panels. The trade case has been cited by the solar industry as one of the most significant dangers to its otherwise bright future, labeling potential tariffs an “existential threat.” Many solar project developers use cheaper panels imported from places like China, and trade barriers could upend the economics of new solar projects.
But all is not lost. The 35 percent tariff proposed by the ITC is actually less than what Suniva Inc., the company lodging the complaint, had asked for. Suniva filed for bankruptcy earlier this year, blaming a wave of cheap imported panels for its demise. Suniva wanted tariffs on the order of 32 cents per watt, which is roughly equivalent to the full price for a panel on a per-watt basis. The proposed 35 percent tariff would translate into about 10 to 11 cents per watt, about a third of the 32 cents Suniva wanted.
As a result, the solar industry is breathing a sigh of relief, having potentially dodged a massive bullet. “That’s below the price that people have been hoarding panels for,” Jeffrey Osborne, an analyst at Cowen & Co., told Bloomberg. “On the demand side, jobs cuts won’t be as bad as feared, but on the manufacturing side, job creation won’t be as big. This would have a limited effect.”
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