The US Solar industry was set to boom. In total $8 billion worth of utility-scale projects on the calendar for a five-year period ending in 2022. In January 2018, President Trump imposed tariffs of up to 30% on most imported solar cells used in solar panels. He is aiming to boost domestic manufacturing.
According to Dan Whitten, spokesman for the Solar Energy Industry Association
“The solar industry’s main trade group, even before the amount of the tariffs were announced, several projects were canceled.”
“The problem is that installers, banks and power purchasers didn’t know how high the tariff would be.”
“People kind of deferred planning. They decided not to go forward with projects because of that uncertainty,” explains Whitten.
Only about 10% of solar panels installed in the US are made domestically
Another problem is that tariffs also were imposed on materials such as steel, aluminum and electrical components, adding to the cost of building a solar farm.
“The only way that we are able to deliver projects is if we are the lowest-cost alternative to what a utility is proposing to build themselves,” says Bret Sowers, vice president of development and strategy at Southern Current, which builds solar farms mainly in the Southeast. “When you add up all of the tariffs, in addition to the tariffs on solar panels, the solar industry got hit really hard based on the components we use to build our projects.”
Sowers pointed to the $130 million worth of projects canceled or delayed in 2018 by Southern Current. A similar amount in 2019. Cypress Creek Renewables also canceled or delayed $1.5 billion worth of solar projects that were planned for 2018 through 2020. For both companies the cost of the solar panels simply made it too difficult to compete with other electricity sources.
Adding insult to injury, an estimated 9,000 jobs were lost because of the tariffs.
While the hope is to increase domestic production of solar, many remain doubtful. Whitten noted that even if the tariffs jump-start manufacturing in the U.S. as the Trump administration intends them to, solar manufacturing is highly automated, so “not many jobs would be created.”
With the drop of the tax credit for solar from 30% to 10% the solar industry may be hit hard.
This article is brought to you by Blue Sky Solar and Roofing, a solar and roofing company based in Aurora, Colorado. Blue Sky specializes in solar energy, sustainable roofing options and excellent customer service.