Northwest Arkansas Democrat-Gazette
Solar sector brushes off Trump, tariffs
2017 industry’s second-best year; panel installations expected to continue rise
CHRIS MOONEY
The U.S. solar industry had its second-best year on record for installations in 2017, despite the election of an administration that promotes fossil fuels and some worry injected into the market by President Donald Trump’s import tariffs, an analysis found last week.
Utilities, individuals and businesses installed 10.6 billion watts of solar photovoltaic capacity during Trump’s first year in office, according to the analysis by GTM Research and the Solar Energy Industries Association.
Solar installations set a record in 2016, with 15.1 billion watts — or gigawatts — installed. But installations that year were boosted by companies racing forward on projects to ensure they didn’t miss out on a 30 percent federal investment tax credit that was expected to vanish at the end of the year — which didn’t end up happening.
But leaving aside that partial anomaly, installations were 30 percent higher in 2017 compared with 2015, and the industry anticipates that a further 10 billion watts of capacity will be added in 2018.
“Several years ago, our industry had dreamed about reaching double-digit capacity,” said Dan Whitten, vice president of communications at the Solar Energy Industries Association. “And so this was our second year that we had double digits … compared with historical sort of averages, 2017 was a darn good year.”
The 2017 numbers are significant because virtually all of the solar industry’s major growth occurred during former President Barack Obama’s two terms in office, as the administration churned out favorable solar policies.
Last year was the first year with Trump at the helm, and he has been vociferous in his support for the coal industry, which competes with renewable energy.
The Trump administration has proposed slashing funding for solar-energy programs — including the Energy Department division that houses the SunShot initiative, which aims to drive down solar’s cost — and the recently imposed import tariffs are expected to lead to fewer installations by increasing the cost of panels.
“Solar faced a tough year in 2017, yet still enjoyed growth,” Jason Bordoff, an energy expert at Columbia University, said in a statement on the new findings. “After a boom year in 2016 due to the expected expiration of tax credits, the pace of solar growth slowed in 2017, and the industry faces new policy head winds from Trump’s solar tariffs and a corporate tax cut that lowers the supply of tax equity available for the industry.”
Solar panels can be installed on personal rooftops, at businesses and government or civic institutions, as well as at the utility scale. In 2017, residential and utility-scale installations fell from 2016 levels,
but middle-range uses, which the industry calls “nonresidential,” grew.
“It’s understandable that residential and utility kind of fell,” said Varun Sivaram, a fellow at the Council on Foreign Relations who studies the solar industry.
Sivaram noted that these markets are shifting — at the utility scale, state-level renewables policies are providing less pressure to go solar, even as major companies are making up some of the slack by buying large solar contracts.
At the residential scale, meanwhile, there has been push-back in some states about net metering, which allows solar panel owners to sell excess electricity generated back to the grid, Sivaram said. The industry report also said that some major installers have “shifted away from rapidexpansion strategies.”
But the growth in midsize solar, or the nonresidential market, was driven in part in 2017 by a major “community solar” initiative in Minnesota. In community solar programs, large groups of individuals in a community in effect share solar power from a larger installation.
This is expected to be a growth area in coming years, in part because apartment and condo residents cannot put solar panels on their roofs but still may want solar power in some manner.
Whitten noted that uncertainty over Trump tariffs somewhat slowed the market in 2017, even though the tariffs were actually imposed a year later.
“He made his decision on the tariffs in 2018, but the uncertainty over what he was going to do with the tariffs probably didn’t help,” Whitten said.
The drag is expected to continue in 2018 and beyond, but what is noteworthy is that despite the tariffs, the industry is expected to install an additional 10 gigawatts this year and then grow steadily out to 2023, when about 15 gigawatts of capacity is forecast.
“Solar is standing on its two feet,” Sivaram said. “The overall effect of Trump has been negative, and it will be more negative …tariffs will reduce growth 10 [percent] to 15 percent. But the industry is so strong that even with the tariffs, it’s going to keep growing.”