Tariff impact on the U.S. solar market in 7 charts from GTM Research

GTM research solar tariff prediction

The imposition of tariffs on imported solar cells and modules is more a matter of when than if at this point considering the Administration in charge, so GTM Research has been furiously crunching the numbers to understand the fallout across the U.S. solar market based on different tariff scenarios. Here’s a glimpse into that crystalline ball.

Reminder: The ITC will vote on Oct. 31 on a remedy recommendation, submit that recommendation to the White House on Nov. 13, and then Trump will have until January to make a decision. That decision will be imposed 14 days later.

A note from the GTM team: “Our team has been working on this analysis for over a month, so our scenarios (which range from $0.10/W-$0.40/W cell tariffs, in increments of $0.10/W) don’t perfectly match with either Suniva or SolarWorld’s proposed remedies. But SolarWorld’s request aligns closely with our $0.30/W cell tariff, and Suniva’s request is close to our $0.40/W cell tariff scenario.”

Current situation

GTM solar tariff chart_global selling average

Tariff risk has caused module prices to increase, a phenomenon unique to the U.S. While cost reductions in other parts of the system make up some of the difference, the cost to install solar has increased for the first time in ages.

GTM solar tariff chart 2_EPC turnkey pricing

So what comes next?

GTM solar tariff chart 3_tariff free capacity

If tariffs are imposed, GTM estimates that there will be nearly five GW of solar capacity that is not subject to tariffs, either because it is not subject to the scope of the petition (i.e. thin film) or because both the cells and modules are manufactured in the U.S., Korea, Singapore, Canada or Australia, all of which may be exempt. In addition, over 2 GW of modules have already been procured for 2018 projects, which will temporarily dampen the tariffs’ impact on demand.

Those five gigawatts won’t be nearly enough to sustain the market, which is otherwise expected to reach nearly 11 GW in 2017, rising to over 16 GW by 2022.

Tariff impact demand

GTM solar tariff chart 4_PV capacity

GTM estimates that the net impact to its base forecast could range from just 9 percent under a 10₵/W tariff to 48 percent under a 40₵/W tariff. The biggest impacts would be in the utility-scale solar sector, which is most sensitive to price in-creases, while the residential sector would be the most resilient.

GTM solar tariff chart 5_residential solar impact

Every segment, in every state, will be unique. In the residential sector, the biggest volume impacts would be felt in the largest state markets, but nascent states that have just begun to develop vibrant residential solar sectors could disappear almost entirely.

The utility-scale market would be most sensitive because two-thirds of the project pipeline is driven by solar’s razor-thin economic competitiveness with other generation sources.

GTM solar tariff chart 6_utility pipeline

But even the utility solar market could weather a 10₵/W cell tariff with relatively minimal disruption – just over 10% by our estimate.

GTM solar tariff chart 7_utility installs under tariff scenarios

— Solar Builder magazine

SB Buzz Podcast: Standard Solar CEO talks trade case, Gaz Metro deal, new tech at SPI 2017

Standard Solar podcast

At Solar Power International 2017, we grabbed a few minutes of Standard Solar President and CEO Scott Wiater’s time (along with some beers) to chat about the general vibe at SPI this year. The solarcoaster makes sure that each and every SPI has its own weird vibe, but the contrast of the positive momentum in the industry with the looming Section 201 trade case decision made this one feel especially awkward. Scott and I delve into it, but also chat about Standard Solar’s growth under its new owner Gaz Métro, the challenges and opportunities he sees right now and also our (now irrelevant, but mostly correct) predictions for the Browns-Ravens game.

— Solar Builder magazine

Save U.S. manufacturing? 26 solar manufacturers sign letter opposing trade tariffs

section 201 trade petition

Twenty-six American solar manufacturers united in an open letter to the U.S. International Trade Commission (ITC) urging the agency to oppose tariffs that they say would endanger American manufacturing jobs and U.S. competitiveness. The letter follows the ITC’s first public hearing on the petition on August 15, where hundreds of solar workers, elected officials, and U.S. trading partners showed up in force to oppose Suniva’s request for tariffs on imported solar parts.

“The tariffs requested by Suniva would more than double the price of solar panels in the U.S., undercutting the cost-competitiveness of solar and reversing its high growth trajectory. We would be forced to cut our manufacturing, seriously endangering manufacturing jobs at our factories,” said the letter to the ITC. “We have been building our companies to meet demand from a large and growing domestic solar market. That market is now under threat. We are true U.S. solar manufacturers and we ask that you not grant Suniva’s request for global safeguards.”

You can read the whole thing here.

Those 26 manufacturers are:

  • Aerocompact
  • Advanced Solar Products
  • Anchor Products
  • Array Technologies
  • DCE Solar
  • Ecofasten
  • Ecolibrium
  • Gamechange Solar
  • IronRidge
  • NextTracker
  • OMCO
  • PanelClaw
  • Pegasus Solar
  • Quick Mount
  • RBI Solar
  • S-5!
  • Schletter
  • SMASHsolar
  • SnapNrack
  • Sollega
  • Sunfolding
  • SunLink
  • SunModo
  • TerraSmart
  • Tessolar

“Schletter manufactures quality solar mounting systems for utility-scale, commercial, and residential PV applications. From Schletter Inc.’s headquarters in Shelby, North Carolina, the company houses state-of-the-art machinery capable of a high level of production capacities. Based in Germany, Schletter set up operation in the U.S. in 2008 with only four people. Now, we employ 200 in Shelby with plans to grow the business,” said Russell Schmit, CEO of Schletter Inc.

“If you overlap our jobs, with the processing plant and steel mill jobs related to our industry, and those jobs can circle out in the supply chain layers and layers, the jobs affected by our industry are even greater than the jobs we are counting at our respective companies,” added Schmit. “It’s hard to quantify exactly what this trade case could do, but I could see this cutting our business by half at least, so that would cost us 100 jobs or more.”

“The notion by the petitioners that increasing the cost of modules will lead to job creation is not only unconscionable, but also counter to all we have seen since the industry was born,” said Constantino Nicolaou, CEO of PanelClaw. “We urge the commission to reject this petition.”

Thoughts on Section 201 trade case while we await the ITC’s decision

The companies and domestic suppliers, which signed the letter to the ITC, employ more than 5,700 workers across the United States.

There are more than 600 facilities in the United States that build supplies for the solar industry. These companies make steel and polysilicon, inverters and trackers, cells and panels and racking and mounting systems.
If the ITC sides with Suniva, homeowners and businesses who want to adopt solar will face higher prices, and demand for solar will drastically fall. This puts at risk thousands of American manufacturing jobs at factories in every region of the country where products are built. In total, 88,000 solar jobs would reportedly be lost under Suniva’s requested remedy.

“The vast majority of Americans want solar and its continued adoption is vital to drive economic success in the U.S.,” said Michael Maulick, CEO of SunLink. “There is tremendous opportunity for future growth with new technology innovations to create more intelligent solar energy. Companies that embrace innovation and deliver cutting-edge products will thrive, but ones that don’t invest in innovation — like the two petitioners — will fail. Tariffs proposed by the petitioners will not advance the U.S. economy and only stifle continued innovation in solar.”

— Solar Builder magazine