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    Potential Tariff on Solar Panels Would Deeply Impact the NC Industry

    August 2017

    North Carolina is second only to California in installed solar farm power capacity. It’s big business here, thanks to tax incentives and a state law requiring utilities to use some renewable energy. Though many of the state tax incentives have expired, NC is still considered to be solar-friendly, and the industry employs thousands of people each year. Solar farms dot our landscape, and have been placed on vacant or non-producing cropland and abandoned industrial sites. The industry has changed the economies of several small towns. Perhaps that’s why some lawmakers are so eager to save it from an ensuing trade war.

    The Concern

    Solar panels are cheap, and their price has been dropping dramatically in recent years. That’s partly the reason for North Carolina’s solar boom; solar is increasingly affordable for households, businesses, and utility companies. But a case heard this week at the U.S. International Trade Commission (USITC) in Washington, D.C. may change all that. Alleging unfair trade practices, two U.S. solar panel manufacturers that are in bankruptcy asked the federal government to levy steep import tariffs on foreign solar panels. If the USITC sides with the two struggling solar panel manufacturers and recommends a tariff, the final decision will go to President Trump, who has previously expressed support for measures that protect American manufacturers and home-grown industries against foreign competitors. If the tariff is imposed, the cost of panels will rise, and solar companies will have to make some uncomfortable decisions around jobs, expansion, and costs passed to consumers.

    According to the Solar Energy Industry Association (SEIA), the request would more than double the cost of solar panels, forcing developers to increase costs to consumers. It would cost NC 4,700 jobs (88,000 nationwide), roughly one-third of the state’s solar jobs.

    Where NC Stands

    NC’s two Republican U.S. senators and nine members of the U.S. House (8 GOP and 1 Democrat) have joined forces with the solar energy industry and are urging the federal government to allow the flow of cheap imports of Chinese and Asian solar panels into the state. This month U.S. Sen. Thom Tillis urged the International Trade Commission to reject the tariff petition.

    “The tariffs would especially hurt residential rooftop solar projects that are growing rapidly,” Tillis wrote to the commission. “Increasing costs will stop solar growth dead in its tracks, threatening tens of thousands of American workers in the solar industry.”

    U.S. Sen. Richard Burr of Winston-Salem wrote in July that the “success of solar energy in the state and the projected growth in the future will only continue if there is certainty in the supply chain.”

    It all boils down to a potentially sharp increase in the price of solar panels and costs that would have to be passed on to consumers, negatively impacting the entire solar industry.

    North Carolina’s solar industry has come down overwhelmingly against the tariffs.

    Moving Forward

    The USITC will decide next month whether to recommend the full tariff requested, a smaller tariff, or reject it outright. If it’s recommended, President Trump would have until mid-January to make a final decision. If you’re in or partner with the solar industry, now is the time to voice your opinion.

     

    What are your thoughts on the potential tariff? Please share your thoughts below.

     

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