Last week the President announced a new tariff on imported solar panels, and, as someone living in America’s second-most solar powered state and as someone who cares about the future of the planet’s environment, I decided to look into how this would affect my community. I’ve got a new essay out in which I speak with Robert Parker from Cape Fear Solar Systems, and we break down what it means for solar power here on the Carolina coast — and beyond.
Read it here, or scroll down for the full text.
Where the Sun Doth Shine: The impending effects the Solar Panel tariff will have on N.C.
by John Wolfe
Today in America the sun is shining, but a tariff-shaped cloud has blown in from the North and cast a shadow of uncertainty over the solar industry.
Last Monday, January 22nd, President Trump announced that his first major trade action of the year will be to impose tariffs on imported solar panels. The tariff would be 30% in the first year, and will gradually fall to 15% in four years, and will go into effect after the first 2.5 gigawatts worth of panels are imported. This decision comes after a request for government relief by two companies, Sunviva and Solar World. Citing a need to protect American manufacturing, the companies petitioned the government to impose the tariffs through what’s known as a “201 trade action,” in which the company must demonstrate that their business has been harmed by cheaper foreign imports. Ironically, neither of the companies are American-owned, although they do employ American workers: Solar World, a German-owned company, has a manufacturing facility in Oregon, and the Chinese-owned Sunviva has one in Atlanta, Georgia. In a statement, Juergen Stein, CEO of Solar World America, said his company was “hopeful [these tariffs] will be enough to address the import surge and to rebuild solar manufacturing in the US.”
Yet, according to a story in the January 22nd edition of the Washington Post, the Sunviva-Solar World request was opposed by most of the domestic US solar industry. According to the Solar Energy Industries Association, the national non-profit trade association of the solar industry in the United States, “tariffs make solar panels more expensive, and thus discourage their use.” The vast majority of domestic solar jobs lie not in the manufacturing sector, but in the installation and engineering sectors; the SEIA said these tariffs would cause 23,000 installers, engineers, and project managers to lose jobs this year as “billions of dollars in planned investment evaporates.” Additionally, up to a third of the 260,000 Americans employed by the industry are at risk of losing their jobs over the long term, according to SEIA.
North Carolina, with 7,112 jobs in the solar industry and 3,016 megawatts of cumulative solar capacity installed as of 2016, is the second-most solar-powered state in the country. Only California, with 18,296 mW, is first. The question becomes, then, how will this tariff affect us in the Old North State, and in the Cape Fear region?
For answers, encore spoke with Robert Parker, project engineer for local solar company Cape Fear Solar Systems. He admits that this tariff wasn’t a surprise to anyone in the industry. “It’s been a big topic of discussion for the past six to eight months,” he says – especially on trade and clean energy websites – ever since Sunviva and Solar World filed their trade action early last year. “The deeper you look into this, the more you see that this is definitely not a trade action that was meant to benefit American jobs and American industry,” Parker says. Both companies had declared bankruptcy, and claimed the harm was caused by imports, but according to Parker, the business strategies of both companies weren’t very good, and they weren’t able to succeed even compared to other companies which manufactured in the US.
Parker believes that the tariff won’t directly affect the business of Cape Fear Solar Systems, as they already source their panels from California-based manufacturer SunPower. “We still think we’re going to be able to provide a really competitive product in the marketplace, and really provide the best product, quality-wise.” But, Parker qualifies, “from a more macro sense, though, it is kind of a drag. As someone in the industry, I love to see solar adoption… because it furthers the industry. And as someone that is interested in how we can help the environment, [solar power] is really important for that. So from that standpoint, I think the trade tariff is going to be pretty negative.”
The biggest impacts from this tariff won’t be on the scale of individual or business installations, Parker explains. The increase in cost of panels is really going to be felt on big, utility-scale projects, like the vast fields of solar arrays you sometimes see by the side of the road in the Eastern Carolina countryside. “Big utility-scale projects are a large portion of solar adoption in the US,” says Parker, “and price is really important.” When you’re a utility, buying solar panels by the hundreds (or even thousands), even a few additional cents per panel adds up. And that cost increase might be enough to sway a utility’s decision between transitioning to a solar farm or sticking with fossil fuels. “All the forecasting agrees there’s going to be a dip [in installation] in the next few years,” says Parker, “and that’s unfortunate.”
It’s especially unfortunate, given that our planet’s atmosphere continues to warm at record levels. As we see the global temperature creep ever higher, renewable energy adoption is crucial to curb the emission of carbon dioxide, a large contributor to anthropogenic climate change. Power plants, according to the Union of Concerned Scientists, account for 35% of the US’s carbon emissions; other major factors include transportation and livestock. At this time, the best blueprint on the proverbial table for dealing with climate change is the Jacobson plan, designed by MIT engineering professor Mark Jacobson. A critical component of the plan, which has been backed by many climate scientists and environmental activists like Bill McKibben, rests on transitioning one hundred percent of our global energy production to renewable sources (wind, solar, and hydropower) by 2050. A tariff like this one might be viewed by some, this writer included, as an unnecessary roadblock in the path towards a sustainable future (or any future at all – if we warm the planet by more than two degrees Celsius, we’re cooked).
Even though our Federal government might be heading in the wrong direction, climate-wise, at least North Carolina is doing some good things. Last year the General Assembly passed a law, House Bill 589, also known as the “Competitive Energy Solutions Plan,” which gives solar energy an increased place in the state’s power plan (although it also puts a moratorium on new wind energy development in the state). And on the same day the tariff was announced, Duke Energy, in a rare praiseworthy moment, announced a $62 million solar rebate program, “designed to help it’s North Carolina customers with the upfront cost of installing solar panels on their property.”
While these state-level programs by themselves aren’t enough to combat climate change, they are, at least, a step in the right direction – looking forward to a sunny future, rather than backwards at our carbon-powered past. North Carolina continues to be “the summer land where the sun doth shine,” as it says in our state toast. Let’s take full advantage of that.