In this list
Electric Power

Shrugging off tariffs, US solar industry looks for a path toward future growth

Commodities | Energy | Electric Power | Renewables | Natural Gas

Hydrogen: Beyond the Hype

Electric Power | Electricity | Energy | Energy Transition

European Long-Term Power Forecast

Petrochemicals | Oil | Energy Transition

Trainings courses at Global Carbon Markets Conference

Metals | Energy | Energy Transition | Electric Power | Emissions | Electricity | Renewables | Nuclear

New York becomes first state to ban crypto mining powered by fossil fuel plants

Metals | Steel | Steel Raw Materials

Insight Conversation: Luciano Siani Pires, Vale

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Shrugging off tariffs, US solar industry looks for a path toward future growth

  • Author
  • Jared Anderson
  • Editor
  • Bob Matyi
  • Commodity
  • Electric Power

New York — The US solar power industry is digesting the impacts of recently enacted tariffs on imported panels, watching how rate structures evolve as utilities interact with regulators and looking for ways to innovate through energy storage and more efficient deal making, industry participants said Tuesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

On January 22 the Office of the US Trade Representative said that President Donald Trump had agreed to impose a 30% tariff on crystalline silicon solar PV cells and modules, which was below the 50% level allowed under US law. This compromise to levy a 30% tariff coupled with an expectation for continued cost declines have led executives and market participants to view the tariffs, which step down over the next few years, as a bump in the road rather than a full-blown disaster.

"The tariffs were a punch in the gut instead of a complete decapitation," Abigail Ross Hopper, President and CEO of trade group Solar Energy Industries Association, said at the BNEF Summit in New York City.

The impact varies in different markets around the country, with the tariffs making solar development more difficult in areas where the technology is less mature, but in other markets where solar already has a strong foothold and there is more competition, the impact has been less pronounced.

"We've seen a slowing of project flow, but recently we've seen it start to pick up tremendously," Scott Wiater, President and CEO of developer and financier Standard Solar, said during a panel discussion on the future of solar power. The project development market reacted to the uncertainty of the tariff decision by sitting on some projects and waiting to see if they could squeeze out more value. Panel and module prices started to increase ahead of the tariff decision and it seems like a lot of manufacturers are "trying to grasp that increased margin they were achieving" before the tariffs were implemented, Wiater said.

Although now it appears there is a stockpile of inventory building up and an oversupply situation could lead to solar panel prices quickly coming down, he said.


Fearing tariff-related cost increases could hurt their business, several solar installers said they would not pass higher costs down to consumers. About two-thirds of the companies queried by online solar marketplace EnergySage said they would "absorb all or most of the tariffs," according to the firm's founder and CEO Vikram Aggarwal.

And that seems to be playing out, Aggarwal said, based on the prices quoted on their platform, which are down about 1% on a national basis compared to March 2017. Customers do not appear to be impacted by the tariffs, and consumer interest remains strong, he said.

How utilities and regulators move forward on issues like net metering, demand charges and fixed fees for solar adopters will be critical indicators for the US solar industry moving forward. Uncertainty on the retail side of the business and commercial and industrial sector is pronounced due to rate changes, Nam Nguyen, executive vice president at SunPower, said. Utilities are figuring out their business models and looking for ways to keep their customer base by trying to manage the volumetric side of the equation versus things like demand charges, she said. A customer's peak energy use during a billing cycle typically sets the demand charge.

In the face of solar market uncertainty, companies have to innovate and the combination of solar plus energy storage that offers a new value proposition to customers is one way to do that, Nguyen said.


Companies are close to making large utility-scale projects that involve bets on wholesale market prices work, "but you would be foolish to place that bet thinking that power is going to be consistently valued" for a 20- or 30-year spend, Standard Solar's Wiater said. Long-term contracts are currently the dominant project structure.

Energy storage makes it easier to take a long-term bet on a large solar project without worrying as much about shifting power price curves because you can choose when to sell the power. Currently, in markets with lots of solar like California, prices can reach negative territory when the systems all produce at the same time regardless of demand.

Deal making efficiency can also help propel the US solar industry forward. The industry is still plagued by "brokers over brokers over brokers so you get to a deal" and there are five hands in the mix, Wiater said. As the industry gets more efficient, projects that can be directly connected with the money are the ones that are going to work, he said.

--Jared Anderson,

--Edited by Jeffrey Ryser,