U.S. solar panel imports continued climbing during the third quarter as project developers rushed to cash in on an expiring tax incentive, pushing up deliveries close to where they were in late 2017 before President Donald Trump imposed tariffs on most foreign-made equipment.

The number of seaborne shipping containers carrying solar panels to American ports rose 43% from the prior quarter and nearly 250% from a year earlier, according to data from Panjiva. With the federal investment tax credit set to fall to 26% from 30% of eligible costs in 2020, the pipeline of solar projects under development in the U.S. recently swelled to a record 37,900 MW — more than triple of the amount of solar the country installed in 2018.

"There is a lot of activity going on now so that developers can ... hold that 30% tax credit," Scott Moskowitz, director of strategy and market intelligence at South Korean solar panel maker Hanwha Q CELLS Co. Ltd., said in September. "The current [tax credit] step-down situation does affect the market. It's created a rush of demand in the second half of this year."

"The same thing will happen [in] each of the next several years," Moskowitz added, noting that the investment tax credit is scheduled to drop to 10% of project costs by 2022 for commercial tax filers and to be eliminated that year for residential filers.

'Supply chains will move'

The solar tariffs Trump imposed in 2018 were aimed at supporting domestic manufacturing after panel producers in China and Taiwan avoided an earlier round of U.S. duties by shifting some of their operations to other parts of Asia.

However, the White House strategy ran into trouble when, in mid-2018, Beijing announced new policies that slowed the pace of construction in China's solar market, the world's largest, creating an equipment glut that drove down prices globally and blunted the impact of U.S. tariffs.

Though the U.S. has increased its panel-making capacity since 2017, the country is a long way from producing enough of the equipment to meet domestic demand. Meanwhile, the broader U.S.-China trade fight has pushed companies to move more production outside of China in order to sell to American buyers, NextEra Energy Inc. Chairman, President and CEO James Robo said Oct. 2 at an investor conference.

"I think you're going to see prices continue to fall" and "this tariff thing's going to sort itself out," Robo told investors. "You can add [manufacturing] capacity pretty quickly, and so ... supply chains will move."

In the solar market, the big winner from the trade turmoil looks to be Vietnam, whose share of seaborne panel imports to the U.S. grew to 28% in the third quarter from 17% in the first quarter of 2018.

Still, the solar industry continues to face curveballs from the Trump administration. In June, the Office of the U.S. Trade Representative granted a tariff exemption for bifacial solar panels, which can absorb sunlight on both their front and back, only to revoke the waiver in October because of concerns that it would "undermine" efforts to prop up domestic manufacturing. The initial exemption was welcomed by some for pushing the industry to adopt better technology.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, a trade group, called the reversal "an extraordinary and unprecedented turn of events."

"This is unnecessarily squeezing the supply of panels in the United States, thereby inflating prices for consumers," Hopper said in a statement. "In its rush to judgment, USTR missed an opportunity to address the significant shortage of domestic solar panels and its decision will slow the growth of an American economic engine."