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tariff trouble in the solar industry

While solar energy has been on the rise in New Mexico, a recent development on the federal level is likely to have some kind of impact moving forward.

But just what kind of impact and how deep remains to be seen.

Last week, President Trump announced a 30-percent tariff on solar equipment not manufactured in the United States. The solar industry currently generates about $28 billion, with about 80-percent of the panels coming from imports.

The tariff is scheduled to go into effect Feb. 7.

And that will mean costs rising fairly quickly thereafter, but for how long and how much is open to debate.

“Basically, by the end of next month, I have to raise gross pricing about 10-percent to keep my margin,” said New Mexico Solar Group owner Ryan Wallace. “But we secured a bunch of panels in advance. “One benefit is if you already have solar, you’re good. But to purchase solar in the future, it will be a little bit more expensive. It’s going to hurt the industry for about six months, but I think pricing will come back down as more domestic companies start doing solar.”

The tariff is expected to be in place for four years, said Mike Putnam, a salesman for Consolidated Solar Technologies, adding he’s not sure that’s going to be a long enough time for domestic companies to retool manufacturing plants to do the work in the U.S.

“The impact will be sudden and very impactful,” he said. “I have a feeling it’s not a positive thing. It really could affect U.S. jobs. But I think there’s a lot of unknowns. I think with time, within the near future, everyone is going to have a better handle on it. One thing is for sure, pricing is going to go up; 30-percent tariff, that’s significant when everything is cost per watt.”

So the time to act is now, Putnam said.

“We’re basically guaranteeing our current pricing for 60 days,” he said. “A lot more will be known for all of this within a couple of months. There is an allotment of solar that’s been grandfathered before the tariff pricing goes into effect. But the general consensus is that allotment is going to be gone quickly.”

While this is a blow to the industry, the Homewise program that helps lower-income residents buy homes and also has a solar program, SOL Fund, has no plans to change what it is doing.

“From our point of view, we’re not going to make any sort of sudden or reactionary changes to our program based on things that are unknown,” said Homewise spokeswoman Laura Altomare. “We have this product that there’s a big need and big demand for it. It’s pretty exciting. It’s spreading on its own across the state.”