MADISON, Wis. - On Monday, President Donald Trump announced new tariffs on imported solar panels in an attempt to defend American workers and businesses.
Chad Sorenson, president of SunPeak, a commercial solar developer in Madison, said the tariffs are not a good thing for the industry, but they were anticipated.
"While the tariffs are meaningful, they're not as bad as they could've been," said Sorenson.
As electricity prices have gone up over the last 10 years, the price of solar panels has gone down. Currently, a panel sells for 53 cents per watt. Ten years ago, the price was $3.45 per watt.
Sorenson said China's massive investment in solar energy created cheaper imports and influenced the price drop over the last decade.
"About 70 percent of all the solar modules in the world are manufactured in Asia, so the good majority of solar panels that we use in our projects do come from Asia," he said. "Essentially, these inexpensive solar panels enabled the ability for solar systems to compete with the local utility rates."
But in August 2017, the companies SolarWorld and Suniva filed a case with the International Trade Commission, saying they were being hurt by the cheap imports from Asia and Europe.
The commission agreed and sent recommendations to Trump.
This contributed to a slight rise in prices.
"If you can imagine, if there's a feeling that a tariff is coming, then everybody wanted to buy up the existing inventory that was already here pre-tariff. And so there was a shortage of modules in the second half of 2017," said Sorenson.
The 30 percent tariff announced on Monday will be phase out over the next four years. Industry groups are worried this could slow the spread of renewable energy and force businesses to trim their workforces.
But Sorenson is calling the tariff a "bump in the road." He said prices will increase, but solar panels will remain affordable.
For his clients, the panel only accounts for about 30 percent of the price. The cost is decreasing for other components, including engineering, installation and labor.
"In some respects, I think that the solar tariff is going to have a momentary negative impact on solar pricing, but it's not as big as everybody thinks it's going to be," said Sorenson.
On the other hand, Burke O'Neal, the owner of Full Spectrum Solar in Madison, said, "It's going to hit us harder than expected."
Full Spectrum Solar sees more residential clients than SunPeak and does projects as small as 2 or 3 kilowatts.
O'Neal said, assuming the company has to charge 10 cents to 15 cents more per watt, the bills for smaller projects will be about 3 percent higher.
"I'm still optimistic we'll have a good year, but our growth will be dampened a little bit," said O'Neal.
The company gets its panels from Ontario, Canada and Minnesota, so O'Neal said they're already used to paying a little more, but he expects everyone's prices to go up.
Both companies are still unsure how the tariff will affect the price of panels in the future, but said long-term trends show the solar industry will continue to be successful.
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