Tariffs on solar failing to slow momentum

Despite the tariffs that were levied on solar panels, U.S. solar added 2.5 gigawatts of capacity in the first quarter of 2018, up 13 percent from a year earlier, according to the Solar Energy Industries Association. The tariffs on imported solar panels imposed by the Trump administration half a year ago have done little to slow the booming solar market in the United States. Many companies had stockpiled cheap panels in anticipation of the import fees. China reduced the pace of domestic installations, creating a surplus of cheap panels that could spill into global markets.  U.S. consumers have a big incentive to install solar panels in the next year and a half before U.S. tax incentives begin to phase out. So far, there's not enough data to tell how much the import fees are changing project costs, although it is clear that there has not been a dramatic shift.

What is the actual effect of solar tariffs

President Trump signed an order to levy the tariffs in January, with an effective date of Feb. 7. It covers crystalline-silicon solar products, the most common material used in solar panels.
The action followed a complaint filed by Suniva and supported by SolarWorld, two of a small number of companies that make panels in this country. They asked for protection because foreign governments were subsidizing their industries and flooding the market with low-cost solar panels. The complaints about low-cost solar imports have been around for quite a while, and the administration's action was a signal of an aggressive trade policy that has gathered momentum ever since. 

The state of the solar market

For now, the U.S. solar market is going strong. Compared to the industry's initial fears, "the tariffs have had less of an impact, and that is a good thing," said Amanda Levin, a policy analyst for the Natural Resources Defense Council.

Rooftop solar feels less tariff pain

Most of the disruption is being felt by companies involved with utility-scale projects, the large solar farms for which panel prices are a vitally important variable. Companies that specialize in rooftop solar are less affected because they get much of their income from associated services such as installation and have a greater ability to absorb changes in prices. Sunrun, the country's leader in rooftop solar sales, reported this month that it had installed 91 megawatts of solar in the second quarter, up 20 percent from the prior year. It also was a record for the company, although record-breaking performances have become commonplace in the fast-growing solar industry. NRDC's Levin says it is important to note that the solar market would almost certainly be growing even more rapidly if the Trump administration had not decided on the tariffs. That growth would have been good for the U.S. economy and environment, making solar more competitive with fossil fuels.

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