Maine’s solar power industry isn’t cheering President Donald Trump’s decision to impose a tariff on imported solar panels as part of a trade dispute with China. But installers here say they can weather it.
Ever-cheaper solar panels from China have helped to spur the industry’s rapid expansion in the U.S. But last year the International Trade Commission ruled that China was violating international trade law by subsidizing panel manufacturers. Now, Trump is slapping a 30 percent tariff on most panels imported to the U.S.
“It’s something we’ve seen coming for around nine months, and we’ve been planning around it,” says Fortunat Mueller, co-founder of Maine’s largest solar installation company, Re-Vision.
Mueller says as with many installers, the company has been stockpiling solar panels. But there has been a lot of turnover of late, so his inventory will need to be replenished.
“We also have some of the strongest supply-chain relationships in the country, because we’re part of a national solar-buying cooperative and so we purchase at very favorable prices from a number of manufacturers,” he says.
Mueller and others in the industry say they do expect a general slowdown for some period of time, but not a killing blow.
Vaughan Woodruff, president of Pittsfield-based InSource Renewables, has been stockpiling too. His company will be partly insulated from the tariff, he says, because it buys from a Singapore manufacturer that uses American silicone, and Singapore is one of the few countries not captured by the tariff ruling.
Still, he says, panel prices have already been rising across the board in anticipation of the tariff, and are likely to go higher. Panels, he says, are only a part of the overall investment in a rooftop solar system.
“[The 30 percent tariff] may relate to a 5-10 percent increase in the total cost of the system, because the modules are about a quarter of the total system cost,” he says.
Woodruff says that recent double-digit hikes in electricity supply prices in Maine are taking some of the edge off. That’s because when grid-delivered electricity prices rise, the value of solar electricity made on-site rises as well, helping solar installations pay for themselves more quickly.
On top of that, he notes, the tariff will drop each year and end after four years.
Nationally, some observers say the tariff will be tougher on large, grid-scale solar developers who work on tighter margins. But in Maine, officials with the largest solar electricity project ever proposed here are shrugging it off.
“I would say this is a little bit of a speed bump that people are going to have to navigate around, but it’s not going to make a meaningful difference in the ability to bring affordable grid-scale development to Maine,” says Katherine Joyce, legal counsel for the 75 megawatt, Waterville-area project called Dirigo Solar.
The company has yet to break ground on the project, which would be phased in over the next three years. Last month regulators authorized Dirigo Solar to sign a 20-year contract to supply electricity, starting at 3.4 cents per kilowatt hour. That’s extremely low compared to other grid-scale projects in the Northeast — and about half of what Maine residents pay now for electricity.
Industry observers will be watching closely to see if, in fact, the company can come in on target, even with higher panel costs.
This story was originally published Jan. 23, 2018 at 4:56 p.m. ET.