Trump’s solar tariff is ‘bump in the road’ for Utah solar

Trump’s solar tariff is ‘bump in the road’ for Utah solar

(Courtesy of Solaroo)


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SALT LAKE CITY — Utah installed more solar than any other state in 2016, except for California, and is sixth in the nation for total solar installed.

But rumors of a Trump administration tariff on imported solar panels created trepidation in the rapidly-growing solar community, generating an atmosphere of uncertainty for months. Companies in Utah and across the nation were preparing for tariffs as high as 50 percent, and many began to stockpile supplies in preparation, causing prices to rise quickly — even before a tariff.

In early January, the Trump administration placed a 30 percent tariff on solar panels and cells imported from select locations overseas that will be in place for four years and eventually taper off. Trump touted the tariff as an effort to encourage foreign manufacturers to move jobs to the U.S.

“Fortunately, it’s a lot better than it could have been," said Ryan Evans, president of the Utah Solar Energy Association. “It turns into what I would amount to a bump in the road. It’s going to hurt a little bit, but it’s really not going to affect customers too much.”

Evans is among the local solar experts dealing with the tariff and its effects. While he and others remain optimistic, others are not sure what the future holds.

The tariff could create a 5 percent cost increase for both residential and commercial installation, Evans said, but he believes solar companies will absorb that cost rather than pass it on to the customer. This absorption, however, may manifest itself in the form of layoffs and outsourcing.

Though national experts have predicted significant solar workforce job losses, he believes Utah will only see a small decline in jobs.

“The shame of it is, and this is on a national level, there will be more employees likely losing their jobs than jobs that will be created in the manufacturing sector here in the United States. So no matter who looks at this, it’s going to be a net loss in jobs in the country.”

Also, according to Evans, there are only a couple thousand Americans actually employed in the manufacturing of solar PV panels, so the tariff only affects a small percentage of U.S. manufacturing jobs.

However, a week after the Trump administration unveiled the tariff, one of China’s biggest manufacturers announced its plans to open a new plant in the U.S. to avoid the tariffs, partially fulfilling Trump’s promise that the tariff would encourage manufacturers to move to the U.S. It remains to be seen whether other manufacturing companies will follow suit.

Many Utah companies, however, have already planned for the eventuality of a tariff, Evans said. A recent settlement with Rocky Mountain Power that changed the economics of rooftop solar already spurred many solar companies in the state to improve backend operations and efficiencies to avoid passing increased costs on to customers and keep solar affordable.

Elias Bishop, director of government affairs for Auric Solar, said the Utah company expected to see more of a decline in utility-scale solar rather than residential and commercial, Auric’s main focus. But even that decline was not as detrimental as the company thought it would be.

“We’ve been planning and preparing for even the worst case scenario, and what happened was not the best but definitely wasn’t the worst. So the impact for Auric really isn’t going to be that significant,” he said.

“(With) the ever-changing industry, we get changes in regulation, and so we constantly plan and prepare for those changes. The neat thing about having a decision out now is that, for months, there’s been a cloud of uncertainty on the market. … But that uncertainty is gone. People know exactly what they’re dealing with.”

Thanks to Utah’s more established solar market, most companies are prepared to take on this change, Evans said. He believes states with up-and-coming solar markets will hurt the most, thanks to tight margins and an unsteady customer base.

Cody Cole, COO of Utah solar company PowerCo, says it’s still too early to tell what affects the tariff might have on a smaller company like his.

“We’re seeing distributors that are playing things a little closer to the vest as far as what their pricing lists are going to look like in a month,” he said. “Some of our larger distributors that we have partnerships with out of Asia have told me that they’ve found a workaround. … So there’s just too much speculation right now to know how it’s going to play out.”

Cole expects PowerCo to have more control over its smaller profit margins than a larger player in the solar game, and doesn’t expect to see too many changes in manufacturers since the company already mainly deals with North American vendors and distributors. Auric Solar expects something similar.

“Solar’s not going away. The road ahead is sunny,” Bishop said.

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