New solar panel tariffs will be felt by Arizona companies, consumers

Business News | 24 Jan |

New tariffs imposed Tuesday by the Trump administration on imported solar products will benefit domestic manufacturers, but solar panel tariffs could hit consumers and other parts of the solar energy industry hard, experts said.

The proclamation was one of two signed Tuesday by President Donald Trump, along with a measure imposing tariffs on large washing machines, actions the White House said are needed to “provide relief to U.S. manufacturers injured by surging imports.”

“Our companies have been decimated, and those companies are going to be coming back strong,” said Trump, according to a White House transcript of the signing ceremony. He added that the tariffs would cause companies to manufacture those items in the U.S. creating opportunities for “a lot of workers, a lot of jobs.”

But critics of the move said it could have the opposite effect. The Solar Energy Industry Association said in a statement that the 30 percent tariff on solar components could result in the loss of thousands of jobs and billions of dollars in investments in the U.S.

“These measures will make it more difficult and harder to sell investment in solar energy to consumers,” said Howard Crystal, senior attorney for the Climate Law Institute at the Center for Biological Diversity in Tucson.

“The rooftop sector of the industry will lose jobs like installers and utility programs will lose investors because the time it takes for costs to payback will be doubled,” Crystal said.

The solar panel tariffs follow investigations by the U.S. International Trade Commission and the U.S. Office of the Trade Representative into complaints that the Chinese government was supporting production of solar cells that were flooding the U.S. at below-market prices.

The agencies determined that solar imports were a “substantial cause of serious injury or threat to the domestic industry” and recommended the tariff-quota under the president’s authority to give “relief from injury caused by import competition.”

The proclamation signed Tuesday would take effect Feb. 7 and would allow 2.5 gigawatts worth of cells to be imported before a 30 percent tariff would kick in. The levy would drop by 5 percent a year before ending entirely after four years.

Tempe-based solar manufacturer First Solar saw its stock price jump Tuesday morning before it settled back down to the previous day’s level by late afternoon. A spokesman for First Solar said the company would not comment Tuesday on the solar panel tariffs.

But while U.S. manufacturers could see gains, those gains could be short-lived, said Brandon Cheshire, the president of the Arizona Energy Industries Association.

“It’s an evolving process, but it’s not going to save the companies that prompted this action,” Cheshire said Tuesday.

In 2016, 40 percent of the renewable energy generated in Arizona was solar, according to the U.S. Energy Information Administration. But all renewables still only accounted for 7 percent of the state’s power in 2016, the EIA said.

Cheshire predicts there will be a 15 to 30 percent reduction in solar integration across the state as a result of Tuesday’s action.

Joy Seitz, who runs a solar-energy supply business in Tempe, said she thinks it will just be business as usual.

“It’s just another decision made by a government entity. We have to pivot,” said Seitz, the CEO of American Solar and Roofing.

“We’re happy the decision was made either way because unanswered questions like that cause an unstable market,” she said. “It could’ve been worse.”

Seitz said her company buys solar products from large foreign corporations like Hyundai and LG Electronics because of their “diverse portfolios” and she does not believe that domestic companies will drive prices up because of the tariffs.

But Cheshire believes that large U.S. solar companies will be able to buy up all the available products and raise prices because the tariffs protect them from foreign competition, therefore diluting the quality of their product and service.

“Chinese solar products are just as good, if not, better than U.S. made solar products,” Cheshire said.

When asked whether he was concerned that the solar panel tariffs might start a trade war with other countries, Trump brushed the question off.

“There won’t be a trade war,” said Trump, adding that his administration is also considering tariffs on imported steel and aluminum. “There will only be stock increases for the companies that are in this country.”

Crystal saw a different motive for the proclamation, calling it just another attempt by the administration to undermine renewable energy and promote fossil fuels.

“Their motive is hiding in plain sight,” Crystal said. “It’s just another effort to bail out the dying coal industry.”

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