Trump's Solar Tariff Triggers Concern From Texas Companies

Jan 24, 2018

Monday’s decision by the Trump administration to put a 30 percent tariff on foreign made solar cells and modules has solar business owners worried. Most solar arrays in the U. S. have parts sourced elsewhere.

 


Robert Miggins, CEO of San Antonio-based Go Smart Solar, is worried the change will make residential solar less affordable, and shrink his customer base. Right now, it isn’t clear to him who will bear that cost: his company, his solar panel provider San Antonio-based Mission Solar, or the consumer.

“We will see a slight price increase for the first time ever in solar,” Miggins said. “We’ve got quotes out all over San Antonio to businesses and homes and we’re going to have to figure out how to go back and reprice those.”

The last time the U.S. instituted a tariff on the industry was 2014. It was levied against China and Taiwan for flooding the U.S. market with cheap, state-subsidized solar equipment. This time, Miggins said, it is about protectionism, comparing the levy to an artificial price floor intended to bolster manufacturing.

The four-year tariff includes solar cells and modules and sees a declining percentage in tariff.
Credit Office of the U.S. Trade Representative

“I think this is more a job destroyer than a job protector,” Miggins said of the measure.

His company has doubled in size since last year. Firms like his and the subcontractors they use to install solar make up the lion’s share of the industry’s 374,000 jobs, according to the Department of Energy.

Solar has regularly posted job growth over 20 percent the past few years, according to the Bureau of Labor statistics. Most of those jobs are in installation.

“We’re one of the fastest growing sectors of our economy right now. Solar is just booming,” said Melissa Gonzalez with Solar Electric Texas, an installer of residential and commercial arrays.

Her office went from four to 24 employees in less than three years, but Monday’s move by the Trump administration may put the breaks on.

“It’s gonna dampen the job growth,” she said. “I don’t know if we’ll be able to expand at the same pace as we did because of this. We just don’t know.”

Robert Watson, who owns Solar Electric Texas along with solar businesses in Arizona and New Mexico, used around 30,000 solar panels last year and 99 percent of them were from South Korea.

Despite the increased volatility this measure introduces, he supports the government and its move to raise costs.

“Either we need to have some ingenuity in how we operate our businesses to say successful in the solar industry or we don’t and we’ll fail,” he said.

Credit Courtesy Mission Solar

Many in the solar field aren’t certain just how big the jump in cost will be. San-Antonio based Mission Solar builds its own modules, but sources its solar cells from abroad. The company is owned by OCI Solar, which is headquartered in South Korea.

Mission announced Tuesday that it is taking on on additional staff to ramp up production of its residential and commercial products.

In a statement, the company’s spokeswoman Alexandra Lucas said,“We will stay optimistic about the outcome given that the decision includes continued access to a certain number of duty-free cells.”

According to the U.S. Office of the Trade Representative, cells and modules up to 2.5 gigawatts are exempt from the new tariffs.

Paul Flahive can be reached at paul@tpr.org or follow him on Twitter @paulflahive