SunCommon preps for solar-panel tax, says it harms everyone

Some local industries wanted the protections.

But whatever the reason, the consequences probably won’t be severe.

It’s the world’s fastest growing energy industry. A 50% tariff, for instance, would increase the cost of basic solar projects by up to 6% and utility-scale solar projects by up to 17%, according to ClearView Energy Partners, a research firm.

The Journal reported Tuesday the Trump tariff may spur an unnamed panel manufacturer to invest in a new plant in Florida that will create 800 new jobs.

The broader risk is in a trade war, in this case with China and other manufacturers of solar panels and cells.

“U.S. trade and investment with China supports roughly 2.6 million American jobs, across many industries”, it said, adding that China’s enormous size and future growth will fuel “more market opportunities for US businesses”. The European Union recently followed suit.

During the last several years, the solar industry in Texas has grown at a rapid pace.

This is especially true because the major-appliance industry is one of the most concentrated in the USA, with just four major manufacturers taking over 90% of the market share.

But in the age of globalization and supply chains, things aren’t so obvious.

“We will see a slight price increase for the first time ever in solar”, Miggins said. “In 2017, one of the two remaining USA producers of solar cells and modules declared bankruptcy and ceased production”. Beijing has been singled out by the president as especially guilty of undermining American industry. It’s hard to quantify the impacts of possible retaliatory tariffs that other countries may impose on US exports – which would make the economic impacts of a awful decision exponentially worse. America, the free traders say, has no right to shield its domestic manufacturing from the onslaught of unfairly traded imports.

Certainly, such protectionist measures are likely to provoke retaliatory measures, while doing nothing to address the economic forces that have battered U.S. manufacturers and impelled manufacturing out of the country. Solar power promises to be even cheaper. While such trade measures wouldn’t pose a significant hurdle for Chinese exporters, they risk spurring other countries to pursue their own protectionist campaigns, said Tomas Gutierrez, an analyst at Kallanish Commodities.

What does all this mean for the future of the solar industry in Texas? Instead of receiving credit from their utility for generating more electricity than they use in a given month, these households authorize the utility to apply that credit to a needy household’s bill.

While this tariff is clearly intended to help solar manufacturers, but that doesn’t mean it’s a blessing to the entire solar industry. Its panels are more expensive than competitors and, as a result, the tariff on its imports will be higher as well.

The proposed tariff on solar panels has the potential to be truly harmful. In 2017, a solar module producing one watt of power cost only around one-fifth of what it did in 2010. If it can’t get an exemption for high-efficiency solar panels, that bright spot could turn into a weakness.

At this point, the march of technology looks to be more important than the vagaries of government policy.

Shawn Micken said the price of installing solar panels will go up but it is still a good investment. The tariffs Obama imposed on China didn’t do much to halt the spread of solar. Manufacturing is a relatively small slice of the sector. “But a majority of solar companies are actually not supportive of it, so that’s unfortunate”.

CHANG: OK, let’s start with who wins with this new tariff. On Monday, they said maybe 23,000 – a big number, but not as big as it could’ve been.

Noah Smith is a Bloomberg View columnist. – Ed.