US hits imported solar panels
• New tariffs seen as blow to a booming world industry and may cost thousands of Americans their jobs
US President Donald Trump’s decision to slap tariffs on solar panel imports is a blow to a booming global industry and hit stocks in European and Asian solar groups.
US President Donald Trump’s decision to slap tariffs on solar panel imports is a blow to a booming global industry, and hit stocks in European and Asian solar groups on fears their business might suffer.
Although the move was intended to help US manufacturers, some in the sector said it would slow US investment in solar power and cost thousands of US jobs.
Trump on Monday approved a 30% tariff on solar cell and module imports, dropping to 15% within four years. Up to 2.5GW of unassembled solar cells can be imported tariff-free in each year.
The news sent SMA Solar, Germany’s largest solar group, which makes 46% of its sales in the Americas, down 4.6% to a four-week low, while Norway’s REC Silicon shed 1.2%. German Finance Minister Peter Altmaier said the cost of solar products in the US was likely to increase, and that Berlin would discuss the matter with Washington.
The US has the world’s fourth-largest solar capacity after China, Japan and Germany. Globally, solar capacity soared to almost 400GW last year from under 10GW in 2007, according to the International Renewable Energy Administration.
The US-based Solar Energy Industries Association said the decision could cause the loss of around 23,000 US jobs this year, and result in the delay or cancellation of billions of dollars in solar investments.
The US government argued that its domestic manufacturers could not compete with what it said were artificially lowerpriced Asian panels.
The Chinese firms that are the world’s biggest makers of solar photo-voltaic cells will be hit by the tariffs at their production sites across Asia.
Jack Feng, vice-president at Trina Solar, one of China’s top panel makers alongside Jinko Solar, said his firm would “expand their territory to a broader range in the globe”, including Europe, China, Indonesia and India.
MAKING ITSELF A TARGET
China’s ministry of commerce said on Tuesday the decision damaged the global trade environment, and the ministry of industry and information technology said Chinese solar companies were likely to curb overseas expansion.
“China’s solar industry has been growing at a fast pace in recent years, making itself a target of protectionism in some countries,” it said.
South Korea said it would “actively respond to US trade protectionism”, including exercising its rights under the World Trade Organisation. Morgan Stanley warned of wider economic damage as the protectionist stance “could challenge investors’ perception whether the US will adhere to current free trade policies”.
There is still uncertainty about when the tariffs will be imposed and how the tariff-free imports will be shared out. SMA Solar said it could not yet make a full assessment but added: “We do not expect a major collapse of the US market.”
The share price of US panel maker Sun Power climbed 0.8% on Monday and electric car maker Tesla, which also produces solar panels, gained 1.5%. Yet analysts said the benefits for US firms were not clear-cut.
“The overwhelming majority of the 260,000 solar jobs in the US depend on the cheaper imported products,” Height Securities said. Goldman Sachs estimated that the tariffs implied “a 3%-7% cost increase for utility-scale and residential solar costs, respectively”.
However, it remains possible that some manufacturers may win exclusions.