Solar panel tariff adds volatility, but Utah companies stay optimistic

Saturday , January 27, 2018 - 5:00 AM

A new tariff on panels may have dimmed prospects for U.S. solar installers, but Utah’s local industry is trying to look on the bright side.

The Trump administration announced Monday a 30 percent tariff on imported photovoltaic cells and modules, which will decline by 5 percent every year until it reaches 15 percent in 2022. The tariff came after two U.S.-based solar panel manufactures petitioned federal regulators. They sought relief from the flood of cheap, foreign-made panels, especially from China, that have saturated the solar market.

The rest of the solar industry isn’t happy.

Installers and manufactures of other solar components — like racks and inverters — employ far more people in the U.S. than panel manufacturers. The Solar Energy Industries Association estimates that the solar industry employs 260,000 in the United States, the bulk of them in installations. Of the 38,000 people working in U.S. solar manufacturing, only 2,000 make panels. The association estimates the solar panel tariff will cause 23,000 people to lose their jobs.  

“By imposing a 30 percent tariff on solar modules, they’re really going to be reducing demand and reduced demand means reduced jobs,” said Kyle Hartman with Gardner Energy.

The West Haven-based solar installation company employs about 15 people.

“We’ll probably see more jobs lost from the tariff being imposed than net job gain in manufacturing,” Hartman said. “As far as the tariff being a good idea, it seems counterproductive.”

Still, Hartman said there are lots of unknowns. Companies don’t know if certain countries will be exempt from the tariff. Gardner gets the bulk of its panels not only from China, but from Canada, South Korea and Singapore, too.

They’re also not entirely sure how much the tariff will raise prices. When someone has panels installed on their home, they’re paying for a lot more than just the panels — they’re paying for consultants’ time and they’re paying for all the other hardware anchoring panels to the roof.

Hartman’s own rough calculations found the average residential rooftop array will see a cost increase of about $900 to $1,200. Things could be worse, he said.

“That adds a year, year-and-a-half, back to someone’s payback period. Is that a deal breaker? Definitely not,” he said. “It’s a little early to know how it’s going to impact us.”

Most solar businesses in Utah, in fact, appear to be in a similar “wait-and-see” mode, and most are maintaining some optimism, too. 

“We are disappointed in the decision made by the Trump administration to set a tariff on imported solar panels,” said David Bywater, CEO of Lehi-based Vivint Solar, in a statement.

Vivint is one of the largest residential installers in the U.S., but Bywater sees a silver lining for the future of solar. 

“We know that 90 percent of Americans, regardless of political affiliation, overwhelmingly support the expansion of solar power because they know it’s a good thing for the health of our environment and economy, as well as our energy independence,” he said. “... Our priorities remain unchanged.”

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Clearfield-based Futura Industries manufactures racks and frames for solar panels. 

“We’re not quite sure what the long-term impact is going to be, but we’re hopeful the market continues to grow,” said Brett Francom, the company’s head of sales and marketing. “It’s been great for a lot of years.”

Sarah Wright, founder and executive director of Utah Clean Energy, said she figures large-scale solar projects will most likely feel the brunt of the tariff’s blow, because panels make up a larger proportion of their costs.

“I can’t predict what the increase will be on rooftop solar, but it will be a smaller impact than utility-scale projects,” she said. “Solar will continue to be an economic option, just not as economical as before.”

Still, even Rocky Mountain Power — Utah’s dominant power utility — isn’t too concerned about the tariffs. 

“All our solar projects are already under contract. All the pricing has been established, so it doesn’t affect anything like that,” said spokesman Spencer Hall. “It’s not going to affect our commitment to renewable energy and solar.”

Rocky Mountain Power provides grants for community solar projects through its Blue Sky Program. Most applicants were aware of an imminent tariff, Hall said, and factored price changes into their applications. 

“There were rumblings this was going to happen. I know a lot of them have been preparing for this,” Hall said, adding the power provider hasn’t noticed a decline in Blue Sky applications. 

“There’s a lot of interest in solar in Utah and in renewables. We’re going to keep doing our research and finding ways to keep building these things out,” he said.

Looking long term, however, the biggest impact on Utah’s solar industry could be all its volatility.

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Solar advocates struck a deal with Rocky Mountain Power less than a year ago, when the utility’s proposed changes to net metering threatened to cripple installation companies. State lawmakers are slowly drawing down tax credits for solar installations, too. This year, the credit will drop from $2,000 to $1,600 and continue reducing by $400 every year until it’s gone.

“I think the overall issue is that solar is being hit on many sides,” Wright said.

Hartman with Gardner Energy shares those sentiments.

“From all angles, the industry is having a lot of adjustments to make. It’s been frustrating,” he said. “I think the uncertainty it what hurts us the most.”

Contact Reporter Leia Larsen at 801-625-4289 or Follow her on or on Twitter @LeiaLarsen

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