Section 201 Solar Trade Isn't Great News

President Trump’s judgment on the Section 201 solar trade case could have been worse for the U.S. solar market -- but it unquestionably isn’t good news.

The government unveiled tariffs yesterday that was less difficult than the remedies requested by trade case petitioners Suniva and SolarWorld Americas. Trump ultimately passed a 30 percent solar import tariff for crystalline-silicon solar cells and modules, which steps down by 5 percentage points each year to 15 percent by the fourth year. In addition, 2.5 gigawatts of cells are exempt from the tariffs annually.

What Now For The Solar Market?

“Essentially, this has a meaningful but not destructive impact on solar installations, and at the same time it’s not exceptionally encouraging for domestic solar cell and module manufacturing,” said MJ Shiao, head of Americas examination for GTM Research. “Some people look at it as a win-win; some people look at it as a lose-lose.”

GTM Research published a revised forecast today that finds the U.S. solar market will see a net reduction in installations of around 11 percent as a result of the new duties. That translates to a cumulative 61.3 gigawatts of solar deployed over the next five years matched to an original projection of 68.9 gigawatts, for a 7.6-gigawatt reduction in installed solar PV capacity between 2018 and 2022.

The tariffs result in a normal 10 cent per watt increase in year 1 prices for modules, stepping down to a 4 cent per watt premium by year 4.

Utility-scale solar will take the brunt of the result, accounting for 65 percent of the expected 7.6-gigawatt decline. 2019 is expected to be the most painful year for the utility-scale sector, with a 1.6-gigawatt decline in installations compared to GTM Research’s original estimate. 2018 is relatively insulated from the tariffs, with a forecast decline of 525 megawatts, because many installers locked in their module orders early in anticipation of trade unfolding.

Annual U.S. Installation Reduction

“So that kind of dampers the economic impact,” he declared. “Later this year and in 2019 -- when people start to buy more modules fully affected by the tariffs -- the full impact sets in.”

Indeed with the new duties, GTM Research expects the industry to deploy more than 10 gigawatts of solar installations in the U.S. this year, and 11.9 gigawatts next year, with continued maturity through 2022. But that growth will be at a leisurely pace than initially expected.

“The reason why we think the 2018 impacts are muted is because we think there were somewhere between 2 to 3 gigawatts of modules in the U.S. by the end of the year basically dedicated for projects in the works -- projects under construction to come online in the first half of the year or allocated modules for projects that will begin construction in early 2018,” proclaimed Shiao.

The new investigation shows that new and emerging state solar markets are disproportionately affected by the tariffs, with Southern states like Texas, Florida and South Carolina with the most significantly impacted by the tariffs. Oregon, the home state of trade problem petitioner SolarWorld Americas, will be the eighth most troubled solar market in the country. Georgia, Suniva's home state, will be the fourth most affected exchange.

Times are kinda rough, but the cost of solar is still at an all-time low here in the United States.  There is simply no better time than now to get into solar.  Move into the future with solar with the help of HahaSmart., Try our price checker tool and see how affordable solar really is. We can also help find qualified solar installers who can help save you money on the cost of going solar. Don't forget to visit our solar blog section for more handy guides and articles, about going solar.