Trump imposes Solar Tariff on Panel Imports

President Donald Trump has imposed a solar tariff – on solar panel imports, which is expected to have myriad repercussions for local manufacturers and their ability to compete against competitors in China and South Korea. Will this have an impact on solar panel technology, and what will it mean for local manufacturers?

Trump’s Solar Tariff – What Now?

An ostensible slap in the face to the renewable energy, Trump’s idea of raising import tariffs by up to 30% may have a few benefits, at least for USA based companies. 

Donald Trump Imposes USA Solar Tariff
Donald Trump Imposes USA Solar Tariff (source: @realDonaldTrump via Twitter)

First Solar Inc., USA based panel maker saw their shares jump by almost 10% in after-hours trading. Shares of U.S. home appliance manufacturer Whirlpool jumped also 5 percent on Tuesday on the back of the news, as washing machines have also seen a tariff imposed on them.  

According to Time magazine, however, the move will stifle a $28 billion industry not only overseas, but the raised costs of solar panels will also harm the American solar industry. The Solar Energy Industries Association has projected tens of thousands of job losses in a sector that currently employs 260,000 people, America wide. These tariffs are on the back of Trump’s administration pulling out of the international Paris climate agreement, and rolling back regulations on power plant emissions. 

According to a statement made by President Trump on Monday, the first 2.5 gigawatts of imported solar cells will be exempt from the tariffs. Four years of tariffs will then start at 30 percent in the first year and gradually drop to 15 percent.

“Developers may have to walk away from their projects,” Hugh Bromley, a New York-based analyst at Bloomberg New Energy Finance, said in an interview before Trump’s decision. “Some rooftop solar companies may have to pull out” of some states.

CNBC reported that Credit Suisse analyst Susan Maklari told her clients that Trump’s decision wasn’t all that surprising.

“All those producing in the US will now face a similar cost structure, creating a more level playing field,” wrote Maklari. “Based on filings by LG and Samsung, they have a combined roughly 33 percent share in the U.S. suggesting 3 million washers are brought in annually. That said, both have commenced construction of U.S.-based capacity, which is expected to come on line over the next 12-18 months. As such, we expect this decision to become less impactful in time.”

Only time will tell what impact this has on the renewable energy industry as a whole, but these sort of protectionist regulations are rarely a step in the right direction. Watch this space…

 

Read More Solar News:

Hazelwood Shutdown – The implications for Australian Power Prices

After over 50 years of service, the Hazelwood shutdown will finally be completed today . Hazelwood, the Engie and Mitsui owned power plant operated at 1600 megawatts and was a brown (‘dirty’ coal) fired plant, is located in Victoria and supplied almost 25% of the state’s energy (and about 5% nationwide).

This has led to a steady surge in energy futures for the April-June quarter (over 300% in the past year) as per data from the AEMO (Australian Energy Market Operator)

Melbourne analyst for UBS, Nik Burns, wrote in a report this week that the energy market is “…struggling to absorb the potential impact of the closure on future electricity prices” which is leading to “increased volatility”. As the graph below shows Australia’s already struggling power and energy market have reacted with steadily increasing panic to the situation:

Hazelwood Shutdown
Hazelwood Shutdown (source: smh.com.au)

 

Federal Energy Minister Josh Frydenberg has previously said that Victoria could import energy from NSW and Tasmania (coal-fired and hydro generated, respectively) – and according to SMH, and Australia’s electricity grid operator over the next two years there is a prediction of 72 days of high demand conditions/possible power supply shortfalls if next summer is even close to as hot as predicted. As previously highlighted, the plant supplied a massive 25% of Victoria’s power and the 72 days of potential power “reserve shortfall” – which doesn’t necessarily mean blackouts, but certainly shows how reliant the state (along with SA who have myriad similar woes) will be on imported power over the coming months following the Hazelwood shutdown.

However, investigating the situation further it may not be as bad as that sounds – these predictions are based on ‘extreme demand scenarios’ – which refers to the assumption of ‘once in a decade’ electricity usage. A scenario like this is possible for days and even weeks over the next couple of years, but 72 days seems extreme at best. Dylan McConnell from the University of Melbourne said “If there’s a 45-degree day, or three 45-degree days in a row, or a generator fails you could have demand at that level and get a shortfall in Victoria, but it’s not going to happen 72 times in two years,”.  Grattan Institute energy program director Tony Wood agreed that the electricity supply was unlikely to be interrupted in summer 2018/19.

“The most likely outcome at the moment is that we will get through this,” Mr Wood said.

Regardless, Australia’s transition to a clean energy remains fraught with uncertainty (apart from the seemingly inexorable price hikes). With the $2billion Snowy Mountain expansion “Snowy Hydro 2.0” still years away (the feasibility study should be completed by the end of the year) we face a few interesting years as we try to balance reaching our 2030 renewable goals and keep energy on while minimising blackouts and load shedding across the country.

Read More Solar News: