Today in America the sun is shining, but a tariff-shaped cloud has blown in from the north and casts a shadow of uncertainty over the solar industry.
Last Monday, on January 22, 45 announced his first major trade action of the year will be to impose tariffs on imported solar panels. The tariff would be 30 percent in the first year, will gradually fall to 15 percent in four years, and will go into effect after the first 2.5 gigawatts’ worth of panels are imported.
The decision comes after a request for government relief by two companies: Suniva and SolarWorld. Citing a need to protect American manufacturing, the companies petitioned the government to impose the tariffs through what’s known as a “201 trade action,” in which the company must demonstrate their business has been harmed by cheaper foreign imports.
Ironically, neither of the companies are American-owned; although, they do employ American workers. SolarWorld, a German-owned company, has a manufacturing facility in Oregon, and the Chinese-owned Suniva has one in Georgia. In a statement, Juergen Stein, CEO of SolarWorld America, said his company was “hopeful [the tariffs] will be enough to address the import surge and rebuild solar manufacturing in the U.S.”
According to a story in the January 22 edition of The Washington Post, the Suniva-SolarWorld request was opposed by most of the domestic U.S. solar industry. According to Solar Energy Industries Association, the national nonprofit trade association of the solar industry in the U.S., “tariffs make solar panels more expensive, and thus discourage their use.”
The vast majority of domestic solar jobs are in the installation and engineering sectors—not in manufacturing. The SEIA said the tariffs would cause 23,000 installers, engineers and project managers to lose jobs in 2018 as “billions of dollars in planned investment evaporates.”
Additionally, up to a third of the 260,000 Americans employed by the industry are at risk of losing their jobs over the long term, according to SEIA.
North Carolina—with 7,112 jobs in the solar industry and 3,016 megawatts of cumulative solar capacity installed as of 2016—is the second most solar-powered state in the country. Only California, with 18,296 mW, is first. The question becomes, then, how will the tariff affect us in the Old North State—and, more specifically, in the Cape Fear region?
encore spoke with Robert Parker, project engineer for local solar company Cape Fear Solar Systems. He admits the tariff wasn’t a surprise to anyone.
“It’s been a big topic of discussion for the past six to eight months,” he says—especially on trade and clean energy websites, ever since Suniva and SolarWorld filed their trade action early last year.
“The deeper you look into this, the more you see this is definitely not a trade action that was meant to benefit American jobs and American industry,” Parker says.
Both companies had declared bankruptcy, and claimed harm was caused by imports. According to Parker, the business strategies of both companies weren’t very good, and they weren’t able to succeed, even compared to other U.S. manufacturers.
Parker believes the tariff won’t directly affect the business of Cape Fear Solar Systems, as they already source their panels from California-based manufacturer SunPower.
“We still think we’re going to be able to provide a really competitive product in the marketplace, and really provide the best product, quality-wise,” Parker qualifies. “From a more macro sense, though, it is kind of a drag. As someone in the industry, I love to see solar adoption . . . because it furthers the industry. As someone interested in how we can help the environment, [solar power] is really important for that. From that standpoint, I think the trade tariff is going to be pretty negative.”
The biggest impacts from the tariff won’t be on the scale of individual or business installations. The increase in cost of panels is really going to be felt on big, utility-scale projects, like the vast fields of solar arrays sometimes seen by the side of the road in the eastern Carolina countryside.
“Big utility-scale projects are a large portion of solar adoption in the U.S.,” Parker tells, “and price is really important.”
When a utility buys solar panels by the hundreds (or even thousands), even a few additional cents per panel add up. The cost increase might be enough to sway a utility’s decision between transitioning to a solar farm or sticking with fossil fuels.
“All the forecasting agrees there’s going to be a dip [in installation] in the next few years,” Parker tells, “and that’s unfortunate.”
It’s especially unfortunate, given our planet’s atmosphere continues to warm at record levels. As we see the global temperature creep ever higher, renewable energy adoption is crucial to curb the emission of carbon dioxide, a large contributor to anthropogenic climate change. Power plants, according to the Union of Concerned Scientists, account for 35 percent of the U.S.’s carbon emissions. Other major factors include transportation and livestock. Currently, the best blueprint on the proverbial table for dealing with climate change is the Jacobson plan, designed by MIT engineering professor Mark Jacobson.
A critical component of the plan, which has been backed by many climate scientists and environmental activists like Bill McKibben, rests on transitioning one 100 percent of our global energy production to renewable sources (wind, solar, and hydropower) by 2050. A tariff like this might be viewed by some as an unnecessary roadblock to the path toward a sustainable future (or any future at all—if we warm the planet by more than 2 degrees Celsius, we’re cooked).
Even though the federal government might be heading in the wrong direction, climate-wise, at least North Carolina is doing some good. Last year the general assembly passed a law, House Bill 589, the “Competitive Energy Solutions Plan,” which gives solar energy an increased place in the state’s power plan (although,h it also puts a moratorium on new wind energy development in the state). On the same day the tariff was announced, Duke Energy, in a rare praiseworthy moment, announced a $62 million solar rebate program, “designed to help its North Carolina customers with the upfront cost of installing solar panels on their properties.”
While the state-level programs by themselves aren’t enough to combat climate change, they are, at least, a step in the right direction—looking forward to a sunny future, rather than backward at our carbon-powered past. North Carolina continues to be “the summer land where the sun doth shine,” as it says in our state toast.
Let’s take full advantage of it.