By Yann Brandt
What: Trump Announces Section 201 Determinations for Cells and Modules
Summary: Shortly after the Government shutdown ended, Trump announced 30% tariffs on cells and modules with the first 2.5GW of imported cells being tariff free. This ends the 201 proceedings after over 6 months of battling within the solar industry. The tariff has a 4 year life with a 5% reduction each year ending with 15% in year 4.
SolarWakeup View: Now that the tariff is set, the solar industry has a few things ahead for itself. First, it can start transacting again. For the past 6 months, suppliers and EPCs squared off on who takes tariff risk, most of the time neither choosing to take that on and the project was delayed. Second, the industry should be upset at the result. This is a 30% increase on the cost of solar panels for no reason, not even Suniva and SolarWorld can call this a victory meaning everyone is a loser.
The solar industry should also realize that this is the third bad result from a trade case and while the blame is largely on the petitioners, the solar industry has been proven to be weak when it comes to policy. (And don’t come arguing to me about the ITC extension) The next step is to engage the US Trade Representative as outline in the release linked to below. While this is a positive comment, it doesn’t change the extra cost that solar will have to contend with. There will be additional job losses and slower growth.
Look to markets like Texas, South Carolina and remaining PURPA territories for most of the impact. 3 cents per kWh looks a lot worse with an extra $0.10/watt in fees. The squeeze on installers, labor and balance of plant components will be harsh as developers look to make deals pencil.
The positive of this announcement is that it is over and it could have been much worse. Quite frankly I was bracing for that scenario. I have largely been quiet about how the process was run in order to let those in the room give space to advocate and many solar folks did the same which is probably the most successful takeaway in this case. This is however, the third major trade loss for solar. The ups and downs and solar’s inability to squash these cases requires that we become retrospective about what kind of industry we want to work in.
Going forward, you will see public outrage, private sighs of relief, optimistic reviews to boards of directors all culminating in a personal requirement to look in the mirror. SEIA is underfunded. So are the other solar advocacy groups. Solar installers say that margins don’t justify investment and they prefer to keep them local and solar supporters are asking how they can help. When there is a rally they are thinly attended, calls to action barely responded to.
Today is a good day to talk about a reset, a reset that I have pushed back against, but a reset that is required nonetheless. If you have felt un- or underrepresented, you are not wrong. The discussion on fixing that needs to start with the people of solar and it needs to start today.
Related: USTR 201 Determination Release
