President Trump’s 30% import tariff on solar panels manufactured overseas are having negative effects on the American solar industry, particularly for installations. The tariff has prompted such high costs for US solar companies that dozens of them are petitioning for exemption, the New York Times reported.
“While producing more panels in the United States will create a few hundred jobs, the tariffs could cost tens of thousands, largely on the installation side of the business,” New York Times’ Ivan Penn wrote.
Silicon Valley-based PV developer and module manufacturer SunPower, the number 1 ranked player in the country based on 2017 capacity according to GTM Research, says the tariff is costing them as much as $2 million each week.
When SunPower announced the acquisition of domestic panel producer SolarWorld Americas last month, the company’s CEO told the Motley Fool’s Travis Hoium that the deal aligns SunPower with the Trump administration’s desire to have more US-based manufacturing.
The key benefit of the merger isn’t so much the manufacturing plant as the potential for exemption, Hoium pointed out. SunPower is one of dozens of American companies seeking relief from the tariff. In order to be excluded, the companies must demonstrate that they have a unique technology or offering, Penn reported.
Besides straining domestic solar companies, the tariffs are also affecting commercial, industrial, and municipal solar projects. “The solar industry expects to continue adding installations, but growth is estimated to be about 11% lower than projections before the tariffs,” Penn wrote. The tariffs are also going to make it more expensive to pursue solar power as a way to mitigate carbon emissions, he added.
“There might be some places where solar would have won for new generation that now might revert back to wind or natural gas,” MJ Shiao, global lead for renewables and emerging technologies at the research firm Wood Mackenzie told Penn. “In some cases nothing is going to fill that void.”
In April, a bipartisan group in Congress introduced the Protecting American Solar Jobs Act to repeal the tariff. Under the proposed legislation, duties and tariffs would revert to previous rates, Solar Industry Magazine reported. It would also allow companies that imported any affected solar products under the new tariff to receive retroactive reimbursement.
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