- Solar manufacturer SunPower got a boost from Trump administration on Tuesday when the U.S. Trade Representative (USTR) announced the company would receive an exemption from tariffs on solar components under Section 201 of the Trade Act.
- The U.S. company, which manufactures solar modules in Mexico, received exclusions for "certain interdigitated back contact solar cells and modules within specific size and power ranges," according to a SunPower statement. The tariffs had gone into effect in January.
- The order, which was published in the Federal Register and went into effect on Wednesday, addresses multiple technologies being manufactured outside the U.S., but analysts view SunPower as the real winner. The company's stock rose 15% on the news.
In a pledge to invest in American solar manufacturing, SunPower CEO Tom Werner said he anticipates the company's acquisition of manufacturer SolarWorld to close within the third quarter of this year, according to a company statement on Tuesday.
In a Q2 investor call, Werner said the company anticipated Q3 tariffs to cost approximately $25 million. The USTR exemption is not retroactive but it will lead to significant savings starting Wednesday.
This exemption "will automatically improve the company’s profitability," Pavel Molchanov, senior vice president and equity research analyst at Raymond James & Associates, told Utility Dive.
Molchanov said the 30% tariff was costing SunPower between $50 million and $100 million a year.
The USTR filing mentioned other exemption requests, received as of March 16, 2018, that remain under evaluation. Those Section 201 tariff exemption requests could be potentially addressed in another filing at some point.
"Additional exclusions would give American companies access to equipment that is not readily or adequately available from American-based manufacturers now or in the foreseeable future," John Smirnow, vice president of market strategy for the Solar Energy Industries Association, said in a statement.