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Solar companies say Trump's trade war recently 'took a toll' on them
SOLAR energy providers were among the first to be hit by President Donald Trump's tariffs. Now the industry says it is one of the first to be feeling their negative economic effects of a burgeoning trade war with China. The main industry association for US solar companies is blaming a tariff Mr Trump imposed on foreign-made solar panels for a recent slowdown in new construction of large solar arrays in the United States.
At the beginning of the year, Mr Trump imposed a tariff of 30 per cent on foreign solar panels, with the percentage gradually dropping after the first year over the next four years. While a pair of US panel manufactures had sought that protective measure from the Trump administration, most of the rest of the US solar industry depends on panels made cheaply abroad, often in China.
As a whole, the industry opposed the tariff, which they worried would dry up investment and lead to job losses for solar installers and engineers. Both of those fears are being realised, according to the Solar Energy Industries Association, which commissioned a report from the consulting firm Wood Mackenzie published on Thursday.
Between July and September of this year, US solar companies installed just 1.7 gigawatts of new generation in the United States. That is a decrease of 15 per cent from the same three-month period the year before. While growth in installations of solar panels on homes remained relatively flat, the solar tariff "took a toll" on the construction of utility-scale solar projects capable of producing power comparable to traditional power plants. For the first time since 2015, quarterly growth in such large-scale solar arrays fell below one gigawatt.
"As we look at the data and the timing, we think that it has to do with the tariffs," said Abigail Ross Hopper, president of the Solar Energy Industries Association. Since taking office, Mr Trump and his deputies have tended to emphasise the development of more traditional fuel sources of electricity - such as coal, uranium and natural gas - through public lands and policies that favour the extraction and use of those resources.
Nominally, the Trump administration has adopted an "all-of-the-above" energy strategy, but tends not to give as much attention to solar power - at least publicly. Last year the administration, for example, opened two major solar power plants on Bureau of Land Management property in southern Nevada without issuing any accompanying news release.
In his first move in what would become a broader trade war with China, Mr Trump decided to levy a tariff on a nascent solar industry that former president Barack Obama sought to nurse with tax breaks approved by Congress to reduce greenhouse gas emissions from the electricity sector.
Even conservatives at the Heritage Foundation, American Legislative Exchange Council and other right-leaning institutions in Washington objected to the Trump solar tariffs for tilting the scales in favour of one part of the energy sector over another. In total, the US solar industry expects US$8 billion in lost investments between 2017 and 2022 because of the tariffs, Ms Hopper said. That translates to 9,000 jobs either lost or not added to the solar industry to date this year. "In my world, it's a really significant decline," she added.
Those third-quarter results put a damper on what otherwise was an excellent 2018 for the solar business. Solar businesses procured a record 8.5 gigawatts of power in the first half of the year. The US solar sector is still growing despite the tariffs, which will be reviewed next year and expire after 2021.
Wood Mackenzie projects solar installations to pick back up towards the final months of the year as the shock of the tariffs dissipates and delayed projects come online. Other government policies - such as renewable energy mandates in states like California and solar tax credits from the federal government still on the books - are helping to sustain the expansion. So are declines in prices for solar panels driven by improved manufacturing year to year. WP