Solar Power World

  • Home
  • Top Solar Contractors
  • Solar+Storage
  • Articles
    • Most Recent Posts
    • News
      • Latest News Items
      • Solar tariffs
      • COVID-19 News
    • Featured
      • Latest Feature Stories
      • Contractors Corner
      • Installation Practices
      • Trends in Solar
      • Folsom Labs Solar Boot-Up
      • The Solar Explorer
  • Products
    • 2020 Top Products
    • Batteries and Storage
    • Inverters
      • Manufacturing Locations
    • Racking and Mounting
    • Software
    • Solar Panels
      • Manufacturing Locations
  • Leadership
    • 2020 Winners
    • 2019 Winners
    • 2018 Winners
  • Subscribe
  • Resources
    • About SPW
    • Digital Issues
    • Event Coverage
    • Podcasts
    • Product Databases
      • Solar Inverter Models
      • Solar Panel Models
      • Solar Racking Models
      • Battery Storage Models
    • Product Manufacturing Locations
      • Global Inverter Manufacturing Locations
      • Global Solar Panel Manufacturing Locations
    • Suppliers
    • Videos
    • Webinars
    • Whitepapers
  • COVID-19 NEWS

What’s happening with U.S. solar after four months of panel tariffs

By Kelly Pickerel | June 4, 2018

Share

Here we are, four months after 30% panel tariffs were placed on imported crystalline silicon solar panels. Who are the winners, and who are the losers?

Utility-scale contractors are hurting more than those in the residential or C&I markets because their work is more price-sensitive. Cypress Creek Renewables recently said it has canceled 1.5 GW of projects because the tariffs have made them uneconomical. That’s 20% of its project pipeline, and a significant number of contracting jobs.

panel tariffs

An 88-MWdc project in North Carolina completed by Strata Solar

Strata Solar has experienced similar setbacks in its national EPC work. Brian O’Hara, senior vice president of strategy and government affairs, said the uncertainty leading up to the tariff decision was a hard blow even in 2017.

“When we were going through the process of whether there would be tariffs, [it] injected so much uncertainty in the market that it drove prices up anyway and made it difficult to secure panels, difficult to plan for the future,” he said. “That’s behind us. We still have a bad policy with bad tariffs in front of us. There are projects that would have been economic without the tariffs that are no longer economic. We’re building less solar than we would have and employing less people than we would have without the tariffs.”

That’s a bummer about fewer megawatts installed in the utility-scale market, but at least we’ve entered an American manufacturing renaissance, right?

Although China-based JinkoSolar has started plans on a 400-MW panel assembly plant in Florida and South Korea-headquartered Hanwha Q CELLS recently said it is setting up a 1.6-GW module plant in Georgia, those projects aren’t contributing to a surge in American manufacturing today, right now. Chinese manufacturer CSUN confirmed with Solar Power World that it is expanding its Sacramento plant from 400 MW to 600 MW and should start producing U.S. modules this summer (the original plan was to begin producing modules in January 2018). Panasonic/Tesla has said it will pump out 1 GW of cells and panels from its New York facility, but ramp-up has been slow and unconfirmed.

That leaves only a handful of actually functioning American panel assembly sites today. Mission Solar has a 200-MW (soon to be expanded to 400-MW) plant in Texas, Itek Energy has 210 MW of manufacturing capacity in Minnesota and Washington, Seraphim Solar has a 160-MW plant in Mississippi (with plans for an additional 200 MW), with a few smaller manufacturers in between. They may all be jointly taking advantage of a 2.5-GW tariff exclusion on imported cells, but 2.5 GW is a drop in the bucket compared to the expected 61.3-GW demand of installed U.S. solar over the next four years. All segments will be importing tariffed modules.

“We’ve seen announcements, but it’s unclear to what extent capacity actually will grow,” said Dan Whitten, vice president of communications for SEIA, of manufacturing expansions. “We do know that any new manufacturing won’t begin to fill our nation’s demand for solar panels, so the increased costs of projects are real and unfortunate.”

solarworld panel tariffs

SolarWorld’s Hillsboro, Oregon, plant will be revamped to produce SunPower high-efficiency modules.

Shifting focus

When two “American” module manufacturers first requested tariffs on imported solar panels last year, they cited the need to safeguard U.S. manufacturing jobs and increase competition with foreign suppliers. Suniva (Chinese-owned) and SolarWorld Americas (German parent company) are both essentially kaput now, even after the tariffs were initiated on their behalf. Suniva never climbed back from its bankruptcy filing, and SolarWorld was bought by SunPower in April.

American-headquartered SunPower has long been a critic of the tariffs, as they affect its high-efficiency solar modules assembled in Mexico and the Philippines. The company provided extensive documentation to the U.S. trade commission seeking exemption from the tariffs (no possible exemption decisions have yet been made). SunPower said without the exemption, it would have to lay off hundreds of non-manufacturing employees and halt a $20 million manufacturing expansion (possibly for its smaller California line).

In what may be an increased effort to show the U.S. government that it is all-in on American manufacturing, SunPower started the SolarWorld acquisition. The company plans to keep the SolarWorld brand name on certain modules but will manufacture its own high-efficiency modules out of the Oregon plant. SunPower hopes the government looks favorably on this acquisition and grants the tariff exemption, because the company still needs it. By restructuring its focus from large-scale project development to manufacturing, SunPower believes the tariff exemption will allow it to spend more money on R&D to produce a world-leading solar panel.

Losing R&D dollars

Solaria feels similar woes. The U.S. company manufactures the majority of its panels in South Korea but was already expanding its U.S. lines (right now at 40 MW capacity) before the tariffs were announced. Solaria produces a high-efficiency PowerXT module that is constantly being retooled for higher outputs. The current models top out around 350 W, but CEO Suvi Sharma said the company wants to push past 400 W. If only they didn’t have to pay tariffs on their Korean modules, they could invest more money state-side.

“Ironically for a U.S. company, it’s been quite disruptive for us,” Sharma said of the tariffs. “We’re writing checks to the U.S. government instead of investing in R&D. We have an aggressive technology and product roadmap. To meet that, we have had significant growth plans in R&D expenditure. Paying the tariffs has reduced money available for that. This is an unintended consequence of the tariffs. U.S. companies reducing R&D makes us less competitive in the long-term.”

There has always been special interest in Solaria’s product as it’s a premium U.S. module, but Sharma said there hasn’t been any more significant or meaningful interest since the tariffs were put in place. This may also be because Solaria caters to a residential and commercial crowd that hasn’t felt the pinch of the tariffs yet.

Distributor outlook

Maybe no one is looking for un-tariffed American modules because there are still plenty of pre-tariffed foreign modules in warehouses, waiting to be installed. Before the tariff went into effect, many distributors and installers imported large quantities of modules.

“We have been actively working on reducing our inventory levels as we believe that there is current oversupply in the market,” said Thomas Enzendorfer, president of distributor Soligent. “We see pricing for Q2 and Q3 deliveries to come in below pre-tariff product.”

Enzendorfer said the industry is currently reassessing the term “American-made,” and installers aren’t sure what the go-to brand is anymore. There are successful American panels that distributors have available, but they’re not well known enough to be requested as an American option.

“As more players such as Panasonic, JinkoSolar and others are setting up U.S. production sites, it will be a while before a clear and new ‘American panel’ will emerge on the market,” he said.

solartech panel tariffs

Inside SolarTech’s Florida facility

American-made in the residential market

Florida’s SolarTech Universal is trying its best to become that go-to brand. Director of marketing Nathan Rosenstein said the company plans to increase its original 80-MW manufacturing lines to 280 MW, a direct result of the tariff and increased interest in its high-efficiency modules.

“Premium modules have suffered due to the tariff, and we feel that a premium American-made module will help to bridge some of those market gaps,” Rosenstein said. SolarTech Universal is also working out a plan with an unspecified U.S. cell manufacturer for product starting in September. Although the 2.5-GW solar cell exclusion is more than enough to fuel U.S. manufacturers (until Hanwha and other new plants get going), SolarTech still wants a fully American product.

National residential installer Green Solar Technologies has always tried to install American panels and has a good relationship with SolarWorld that COO Edward Harner said he hopes continues as SunPower’s acquisition is completed.

“We’ve seen zero effect of the tariffs,” Harner said. “It’s been good for our business. We can go after the consumers who are more pro-American manufacturing and say we were part of this from the beginning.”

Green Solar Technologies testified in favor of the tariffs at an International Trade Commission hearing and still stands by its decision. Harner said the company installs SolarWorld on 90% of its projects, and when it does have to use imported panels, a total project increase of $1,000 on a 5-kW system barely registers with the customers. It appears to be business as usual for the residential market.

So here’s a tally, four months in to the tariffs:

Losers: utility-scale installers, module R&D

Neutral parties: residential installers

Winners: ¯\_(ツ)_/¯

See news that also came out today: Why China’s abrupt halt on solar development may affect U.S. module buyers

About The Author

Kelly Pickerel

Kelly Pickerel is editor in chief of Solar Power World.

Comments

  1. Steve Miller says

    June 7, 2018 at 3:05 pm

    Let me shout from the mountaintop, because you utility scale installers have been shouting from there about how bad the tariffs are for the industry. “It Hasn’t Hurt us or anyone, but those putting cheap junk on a customer site”. Our O&M costs are miniscule, because we use material made to work and last, not just profit the installer.
    Utility Scale solar does not take a coal fired plant or nuke plant offline.
    Kudo’s to Green Solar Technologies for keeping US dollars in the US instead of enriching those around the world that don’t even like us.
    If prices rise, it’s not because of current leadership decisions, it’s because they are catching up the dollar that has been inflated for the past 6-8 decades with impunity, which is why the US had to go outside to buy goods from countries with suppressed wages and less inflationary pressure.

    Reply
  2. Chris Jankowitz says

    June 4, 2018 at 4:21 pm

    Until the 5-6GW of modules that were imported prior to the 201 ruling are consumed, no one will be able to accurately predict the impact of the tariffs on the U.S. market. As to those utility scale installers who have cancelled projects, those must be projects that were not starting until Q4’18 or later, as there is more than enough over-supply in the market right now to complete any projects at pre-tariff rates.

    Of course, just as the market over-supply starts to abate, China has already indicated that they are curbing their feed-in tariff limits later this year, in a move that will only exacerbate the industry capacity over-supply. Watch as the find new and creative ways to dump the product into the U.S. and avoid the 201 tariffs.

    Reply

Tell Us What You Think! Cancel reply

Related Articles Read More >

New entrants bring flexibility in rapid shutdown device choice
2021 Trends in Solar
An installation boom is coming to the Northeast and its temperamental soil conditions
2021 Trends in Solar
Freedom Forever becomes “Platinum Elite” solar + storage partner of Sunrun
Racking manufacturers evolve their systems for increasing panel sizes
2021 Trends in Solar

Stay Informed With Great Solar Power Content

Videos Podcasts Webinars Whitepapers

SPW Digital Editions

Solar Power World Digital EditionBrowse the current issue and archived issues of Solar Power World in an easy-to-use, high-quality format. Bookmark, share and interact with the leading solar construction magazine today.

Solar Policy Snapshot

Solar policy differs across state lines and regions. Click to see our monthly roundup of recent legislation and research throughout the country.

Read More >

Popular Posts See More >

Solar investment tax credit extended at 26% for two additional years
The changing state of retiring solar panels
Think before trashing: The second-hand solar market is booming
The winners and losers in U.S. solar manufacturing in 2020
Tweets by @SolarPowerWorld
Solar Power World
  • Top Solar Contractors
  • Solar Articles
  • Top Products
  • Leadership
  • WTWH Media
  • About/Contact Us
  • Advertising
  • Subscribe
  • Windpower Engineering & Development

Copyright © 2021 WTWH Media, LLC. All Rights Reserved. Site Map | Privacy Policy | RSS

Search Solar Power World

  • Home
  • Top Solar Contractors
  • Solar+Storage
  • Articles
    • Most Recent Posts
    • News
      • Latest News Items
      • Solar tariffs
      • COVID-19 News
    • Featured
      • Latest Feature Stories
      • Contractors Corner
      • Installation Practices
      • Trends in Solar
      • Folsom Labs Solar Boot-Up
      • The Solar Explorer
  • Products
    • 2020 Top Products
    • Batteries and Storage
    • Inverters
      • Manufacturing Locations
    • Racking and Mounting
    • Software
    • Solar Panels
      • Manufacturing Locations
  • Leadership
    • 2020 Winners
    • 2019 Winners
    • 2018 Winners
  • Subscribe
  • Resources
    • About SPW
    • Digital Issues
    • Event Coverage
    • Podcasts
    • Product Databases
      • Solar Inverter Models
      • Solar Panel Models
      • Solar Racking Models
      • Battery Storage Models
    • Product Manufacturing Locations
      • Global Inverter Manufacturing Locations
      • Global Solar Panel Manufacturing Locations
    • Suppliers
    • Videos
    • Webinars
    • Whitepapers
  • COVID-19 NEWS