In the biggest blow hes dealt to the renewable energy industry yet, President Donald Trump decided on Monday to slap tariffs on imported solar panels.
The U.S. will impose duties of as much as 30 percent on solar equipment made abroad, a move that threatens to handicap a $28 billion industry that relies on parts made abroad for 80 percent of its supply. Just the mere threat of tariffs has shaken solar developers in recent months, with some hoarding panels and others stalling projects in anticipation of higher costs. The Solar Energy Industries Association has projected tens of thousands of job losses in a sector that employed 260,000.
The tariffs are just the latest action Trump has taken that undermine the economics of renewable energy. The administration has already decided to pull the U.S. out of the international Paris climate agreement, rolled back Obama-era regulations on power plant-emissions and passed sweeping tax reforms that constrained financing for solar and wind. The import taxes, however, will prove to be the most targeted strike on the industry yet.
Developers may have to walk away from their projects, Hugh Bromley, a New York-based analyst at Bloomberg New Energy Finance, said in an interview before Trumps decision. Some rooftop solar companies may have to pull out of some states.
U.S. panel maker First Solar Inc. jumped 9 percent to $75.20 in after-hours trading in New York. The Tempe, Arizona-based manufacturer stands to gain as costs for competing, foreign panels rise. First Solar didnt immediately respond to a request for comment. The Solar Energy Industries Association also didnt immediately respond.
The first 2.5 gigawatts of imported solar cells will be exempt from the tariffs, Trump said in a statement Monday. The president approved four years of tariffs that start at 30 percent in the first year and gradually drop to 15 percent.
The duties are lower than the 35 percent rate the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers. The idea behind the tariffs is to raise the costs of cheap imports, particularly from Asia, and level the playing field for those who manufacture the parts domestically.
For Trump, they may represent a step toward making good on a campaign promise to get tough on the country that produces the most panels China. Trumps trade issues took a backseat in 2017 while the White House focused on tax reform, but its now coming back into the fore: The solar dispute is among several potential trade decisions that also involve washing machines, consumer electronics and steel.
Its the first opportunity the president has had to impose tariffs or any sort of trade restriction, Clark Packard, a trade policy expert at the R Street Institute in Washington, said ahead of the decision. Hes kind of pining for an opportunity.
Trumps solar decision comes almost nine months after Suniva Inc., a bankrupt U.S. module manufacturer with a Chinese majority owner, sought import duties on solar cells and panels. It asserted that it had suffered serious injury from a flood of cheap panels produced in Asia. A month later, the U.S. unit of German manufacturer SolarWorld AG signed on as a co-petitioner, adding heft to Sunivas cause.