Solar industry says $5.6B in Southeast projects threatened by tariff

AP Photo/Winston-Salem Journal, Walt Unks

Crews install a solar farm in Davidson County, North Carolina in 2011.

As much as $5.6 billion in solar investments and nearly 15,000 jobs in four Southeast states would be at risk if President Trump places tariffs on imported solar panels, according to an industry analysis.

Trump is expected to decide by January 26 if the solar industry’s heavy reliance on solar panels imported from China and elsewhere are primarily responsible for the financial difficulties of two U.S. manufacturers. One of them, Georgia-based Suniva, has declared bankruptcy and has at least temporarily shut down operations.

The prospect of the tariff poses a significant threat to the growth of solar in Florida, Georgia, North Carolina and South Carolina, according to data compiled for the Solar Energy Industries Association (SEIA) by GTM Research, a Rutgers University economist and the Hughes Hubbard & Reed law firm.

The analysis concluded the tariff would put $5.6 billion of capital investment between 2018 and 2021 at risk in the four states, along with nearly 15,000 jobs. Up to 9,000 megawatts of solar projects could be canceled, it said.

The report supports a claim made earlier this month by South Carolina Gov. Henry McMaster, who told the U.S. Trade Representative that “any increase in solar panel prices will destroy billions of dollars’ worth of investment and result in thousands of job losses” in the state.

“In a regulated energy market like South Carolina, developers sign contracts to sell power at or below the avoided cost rate set by the Public Service Commission, a rise in the input costs would not just wipe out a few projects, it would eliminate most of the competitive solar projects in South Carolina,” McMaster said.

The proposed tariff would add 40 cents per watt to imported panels in the first year. For a typical 7-kilowatt residential system, that could double the cost of panels, adding an extra $2,800. The same per-watt increase for a 1-megawatt utility-scale system would add $400,000 to its cost. The proposed tariff would decline slightly in the second, third and fourth years.

Solar industry leaders hope McMaster, who was among the first elected officials to endorse Donald Trump’s presidential campaign, can persuade the president against issuing a tariff. Trump’s position on the issue was not yet clear.

Executives of Sunrun, one of the largest installers of solar systems nationally and which recently entered the South Carolina and Florida markets, expressed concern for South Carolina’s economy, especially on the heels of a construction shutdown.

“You have a state that just lost thousands of energy jobs at V.C. Summer. We should be encouraging policy at the state and federal level that will grow the economy and create more jobs. Tariffs could send South Carolina in the wrong direction,” said Tyson Grinstead, Sunrun’s director of public policy.

Specifically, Suniva and SolarWorld Americas filed for the tariff under Section 201 of the 1974 Trade Act. It allows for temporary relief in situations where surging imports are causing “serious injury” to a U.S. industry.

In opposing the tariff requests, SEIA and its allies said there was scant evidence that any such charges would boost U.S. manufacturing. The trade group offered a compromise on December 4 that would collect money from an import “license fee” for investing directly into U.S. companies.

What’s at stake under a solar tariff?

Solar spending at risk: $2.7 billion
Jobs at risk: 6,800 of 8,260
Projects at risk: 2,841 megawatts

Solar spending at risk: $1.3 billion
Jobs at risk: 3,100 of 3,924
Projects at risk: 2,200 megawatts

North Carolina
Solar spending at risk: $860 million
Jobs at risk: 2,500 out of 7,112
Projects at risk: 2,674 megawatts

South Carolina
Solar spending at risk: $760 million
Jobs at risk: 2,500 out of 2,772
Projects at risk: 1,535 megawatts

Source: Solar Energy Industries Association

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