Solar energy advocates in Wisconsin say the recently announced 30 percent tariff on solar panels is unlikely to have a big impact on the industry.
“Generally speaking, this is a negative development for the vast majority of the solar industry in the United States, but it is not as bad as many believe,” said Chad Sorenson, CEO and founder of Madison-based solar developer SunPeak. “The future of solar in the United States is still quite bright.”
President Trump approved last week the recommendation of the U.S. International Trade Commission to impose this tariff on solar cells and modules. The tariff is 30 percent in the first year, then drops 5 percent each year for the next three years.
Tyler Huebner, executive director of clean energy advocacy group RENEW Wisconsin, notes that solar prices have been coming down at record levels — 70 percent in the last decade — so the economics of solar energy generation shouldn’t be changed much.
He anticipates a “bump in the road,” but says “we’re hoping to make sure everybody knows that solar is a good, clean energy option, and not let the headlines dissuade people.”
Sorenson says “there is more to a solar system than solar modules.”
A complete system requires mounting equipment, inverter technology to convert electricity to a usable form, monitoring equipment, wiring and other materials. The cost of the panels themselves are compounded by installation labor costs, engineering services, permitting, electrical upgrades for the facility and utility interconnection costs.
“The solar modules only represent 30 percent of the total turnkey cost of an installed commercial-scale system,” Sorenson says. “Therefore, keeping all other factors constant, this week’s announced tariffs will have a temporary 5 percent negative impact on solar system pricing this year, and will slowly phase out over the next four years.”
Huebner says prices for solar generation in homes and businesses could go up by 5 percent, while larger-scale utility solar could see up to a 10 percent bump in price. He emphasizes that the full implications of this decision won’t be known for a while, since some of the utility-scale solar projects in the works won’t be built until 2019 or 2020.
“It could be up to 8 to 10 percent; it could be lower,” Huebner tells WisBusiness.com.
Sorenson adds that the solar industry is “making good progress” in reducing major equipment costs, and the “soft costs” associated with solar deployment are also falling.
Meanwhile, stock prices for publicly traded U.S. solar developers “increased sharply” on the news of the tariff, Sorenson notes.
“While there is a lot of negativity in the news this week regarding this issue, we’re as bullish as ever on the future of solar in this country,” Sorenson said.
–By Alex Moe