By - Jim Vess

Trump tariffs take a bite out of U.S. solar market, but future prospects still appear bright

Energize Weekly, December 19, 2018

The Trump administration solar panel tariffs have taken a bite out of the market with third quarter 2018 installations down 15 percent year over year and additions of utility-scale photovoltaic (PV) cells falling below 1 gigawatt (GW) for first time since 2015.

The growth rate for 2018 compared to 2017 is projected to be flat with 11.1 GW of PV installations, according to the quarterly U.S. Solar Market Insight Report done by consultant Wood Mackenzie Power & Renewable and the Solar Energy Industries Association (SEIA).

Over the next five years, the forecast is for strong growth in the sector with installed PV capacity more than doubling and 14 GW of capacity being installed annually by 2023.

“If not for the tariffs, the U.S. solar market would undoubtedly look better today than it does now,” Abigail Ross Hopper, CEO of SEIA, the industry’s main trade group, said in a statement. “However, as this report shows, this is a resilient industry that cannot be kept down for long.”

In January, President Donald Trump approved a 30 percent tariff on imported photovoltaic solar cells and modules with the tariff stepping down 5 percent a year to 15 percent in 2021. The first 2.5 gigawatts of imports were exempt from the tariff each year.

The tariffs added $236.5 million to U.S. solar projects in 2018, according to solar marketer EnergySage Marketplace.

On an average 6-kilowatt residential solar installation, the added cost was about 16 cents a watt or $960, EnergySage, which runs a web-based comparison shopping market, said.

Residential installations were flat for the third consecutive quarter following a year in which there had been a 15 percent drop in installations.

“Stable installation volumes are an encouraging sign that the national installer slowdown that disproportionately contributed to volume contraction in 2017 has finally bottomed out in 2018,” the market report said.

Utility-scale PV, which is very sensitive to solar module prices because of the large volume used in projects, posted a 30 percent decline compared to third quarter 2018 with 678 MW of installations.

“Developers’ uncertainty around the impacts of tariffs on project economics caused Q3 2018 projects to be pushed out to Q4 2018 or Q1 2019,” the report said.

Still, there are 40 projects of 50 MW or more slated to come online in the fourth quarter of 2018, which would make it the largest quarter since the fourth quarter of 2016. There are also numerous projects in the pipeline.

“Developers originally planning to bring projects online in Q3 2018 were forced to push out completion dates to Q4 2018 or Q1 2019 due to uncertainty around tariffs,” Colin Smith, senior analyst at Wood Mackenzie, said in a statement. “We did, however, see utility PV procurement outpace installations fourfold in Q3, showing that despite the tariffs causing project delays, there is substantial growth ahead for the U.S. utility PV sector.”

Leave a Reply

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. more information

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. We use cookies during the registration process and to remember member settings.