A global photovoltaic manufacturer on Friday opened the largest solar manufacturing plant in the western hemisphere, citing the Trump administration's import tariffs as critical to its decision to build.
The plant is located in Georgia and will produce 12,000 solar panels a day along with 1.7 GW of module capacity annually, according to manufacturer Hanwha Q Cells. Approximately 80% of U.S. solar panels were imported in 2017, with the majority of those imports coming from Asian countries, causing concern among solar developers and advocates that the president's tariffs would drive prices up and hurt the domestic market.
- Hanwha Q Cells "long had wanted" to build panels in the U.S., which is the company's largest market, Scott Moskowitz, director of strategy and market intelligence at Hanwha Q Cells North America told Utility Dive in an email. "The tariffs were the tipping point for us in deciding to build a factory." The solar industry maintains, however, that the administration's tariffs have slowed sector growth overall.
The Hanwha Q Cells factory represents a boost to domestic manufacturing and a positive result of the tariffs.
"The [Trump] Administration signaled they wanted to develop a domestic solar manufacturing industry and we responded to that," said Moskowitz.
Trump's tariffs took effect February 2018, causing a steep fall in photovoltaic (PV) installations from the second to third quarter of 2018. Tariffs were set at 30%, declining 5% annually until they reach 15% in 2021.
But the industry bounced back after an initial hit, according to the U.S. Energy Information Administration, which reported that PV imports rose approximately 16% in the four months of 2019, compared to the average number of imports in the first four months of 2017, before the tariffs were put in place. Continued falling costs for panels may be offsetting the tariffs, according to EIA, leading to overall stable prices.
Solar advocates maintain that despite the positive sign for domestic manufacturing, the industry would have done better without the impacts of import tariffs.
"We support the companies that invested in U.S. module assembly facilities in response to recent tariffs and believe we need more manufacturing capacity to meet our long term goals for the industry," John Smirnow, vice president of market strategy and general counsel for SEIA, told Utility Dive in an email.
U.S. installations dipped in the first quarter of 2019, but WoodMackenzie and the Solar Energy Industries Association (SEIA) forecast 17% growth overall in 2019 for solar, with 12.6 GW of new capacity expected.
"The U.S. solar market, however, would undoubtedly look better today without the tariffs," said Smirnow. "Data shows that we have lost thousands of jobs and billions of dollars in investment, but this is a resilient industry."
Maintaining the resilience of the industry will require delaying the investment tax credit (ITC) phaseout, say Smirnow and Moskowitz, which is set to phaseout in 2021, expiring entirely for residential customers by January 2022 and winding down to 10% for commercial solar customers. Bipartisan legislation introduced in the Senate July 25 would extend the full ITC for five years.
"The outlook for the U.S. solar industry is strong no matter the policy, but we are highly supportive of delaying the step down in the ITC," said Moskowitz.