The 30% solar tariff that US President Donald Trump has agreed to impose on imported solar modules and cells will cause the US solar industry to constrict by 11% over the next 5 years, causing nearly a quarter million customers to no longer install solar. It will hit the utility-scale solar sector the hardest.
These are some of the old and new findings from analyses conducted by GTM Research in the wake of Donald Trump’s decision to impose a solar tariff. Last week, GTM showed that the tariff will result in the US solar industry seeing an 11% decrease in installations between 2018 and 2022, a reduction that totals around 7.6 GW (gigawatts) of installed solar — not to mention the expected job losses which the Solar Energy Industries Association expects will be 23,000 in 2018 alone.
“Essentially, this has a meaningful but not destructive impact on solar installations, and at the same time it’s not exceptionally encouraging for domestic solar cell and module manufacturing,” said MJ Shiao, head of Americas research for GTM Research. “Some people look at it as a win-win; some people look at it as a lose-lose.”
This week, GTM Research has published a new analysis which digs deeper into the effects the solar tariff will have on the US solar industry and shows that 2018 will suffer the most visible brunt of the tariffs. This will be offset somewhat by existing and therefore unaffected projects already in development, pushing the real effects through to 2019, which will experience the most significant percentage drop compared to previous projections — a 16% loss as compared to original GTM Research predictions.
By segment, between 2018 and 2022, demand loss in terms of percentage and GW are:
- Utility PV: 11.6%, 4.9 GW
- Non-Residential PV: 10.7%, 1.1 GW
- Residential PV: 9.9%, 1.5 GW
The utility-scale segment will be hardest hit, but will again show these impacts most in 2019, thanks to an existing short-term pipeline of Renewable Portfolio Standard (RPS) projects and projects already in construction. Reductions to demand in the sector will be lower in 2020 and 2021 as projects already in development push out their completion date further to take advantage of the 5%-per-year tariff stepdown. GTM predicts that 2018 will therefore see around 6.1 GW of utility-scale solar installed.
The tariff will have immediate and lasting effects on the US solar industry. 2019 will only just squeak past 2017 figures, and growth thereafter will be staccato and slow. Both the residential and non-residential segments will have a relatively safe, if small 2018, with the tariffs impacts being felt most heavily in 2019. GTM also predicts that the tariff will have implications beyond its end point in 2022.
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