Tariffs on solar panel imports imposed last week by the Trump administration threaten to increase customer costs and cut solar energy growth by as much as 11 percent over the next five years, but the industry remains optimistic that the roadblock will be temporary.
The new tariffs probably will add about $650 to the average solar power system a homeowner would buy, said Bernadette Del Chiaro, executive director of the Solar Energy Industries Association. But the added cost is unlikely to stop consumers and businesses from going solar, or to force solar companies out of business, she said.
"I think in the long run, there's no turning back," Del Chiaro said.
Analysts at GTM Research, a division of Boston-based Greentech Media, estimate that the federal government's decision to impose tariffs on cheap, imported panels, which have fueled the industry's explosive growth, will mean a cumulative reduction in solar installations of about 7.6 gigawatts, or 11 percent, through 2022, compared with what would have been installed without the levies.
The analysis found that the big utility-scale solar power systems would be hardest hit by the tariffs, which starts at 30 percent and decreases 5 percentage points each year of the four-year fee.
Emerging solar markets in Southern states such as Texas, Georgia, South Carolina and Florida are expected to be heavily affected by the tariffs, which are intended to bolster domestic production and sales.
Two U.S.-based firms filed the case for tariffs at the International Trade Commission, arguing that their businesses have been hurt by cheap imports from Asia and Europe, which produce about 90 percent of the solar panels installed in the U.S.
In a 4-0 decision last month, the commission voted in favor of imposing the tariffs to prevent the demise of U.S. solar panel manufacturing, although the tariffs are not widely viewed as helping to salvage the nation's struggling panel production industry.
Tariff proponent Edward Harner, chief operating officer of North Hollywood-based Green Solar Technologies, told the International Trade Commission that his company found it increasingly difficult to offer U.S.-made solar panels to its customers.
"If America is one of the leaders in adoption of solar, we should also be one of the leaders in production of solar," Harner said. "We were the only nationwide installer to testify in favor of these tariffs."
Harner told the commission that over the past five years, solar-panel prices dropped 50 percent, which led many companies to use foreign imports. That, he said, has contributed to driving U.S. companies out of business.
Harner also said he is concerned about the quality of the products from the foreign manufacturers.
"This might cut out some of the riffraff," Harner said. "All in all it kind of keeps the industry honest."
As for the increased cost to consumers, Harner argued that the price of electricity from the utility companies continues to rise too. So slightly higher solar panel prices will still be a good deal for consumers, he said.
"I would argue the price of panels has been artificially low," Harner said.