By: Ian Skor and AJ Lyle, founders of Sandbox Solar
Solar now employs 374,000 jobs nationally and 7,897 jobs locally in the state of Colorado. Much of this exponential growth in workforce has been due to the natural maturation of an industry, innovation, public awareness, and reduction of material costs. Against what one would expect, local installers are offering better value and taking market share from the national brands that make the headlines. This is all great for supporting local economies and Sandbox Solar is excited to be an active participant in this trend in Fort Collins.
Tariffs: Take effect Feb 7th 2018.
US Module Manufacturers Suniva, First Solar, and Solarworld claimed damages from the exponential increase of foreign modules to meet demand. As a result, tariffs have been placed on imported cells. The details of the tariffs are listed in the table below: the first 2.5 GW of cells will be exempt, and the rate of the tariffs will decrease over the next four years. There is also a list of exempt countries from these imported tariffs, including: India, Turkey, and Brazil. These countries will have a defined threshold once further information is released. For reference, the U.S. now installs approximately 2 GW of solar per quarter or 8 GW a year.
Long term, these tariffs will not have a significant impact on the industry as a whole. Solar will reach or has passed grid parity in many regions. Large developers and corporate installers will be able to continue as planned with their buying power and manufacturer-installer partnerships. In the commercial market, where panels make up a greater percentage of project costs, many corporate installers will be able to drive down prices and capture the market. Regional residential companies, such as ours, are subject to almost spot-market module prices. Small companies must leverage their lower overhead costs, leverage local marketing support, and deliver on customer experience to compete. Prices for the residential customer will certainly creep back up, however, still within a competitive range.
In the Colorado market pre-tariff complaint filing, we were seeing module prices on average of $0.56/Watt. After the trade commission filing these jumped up to about $0.64/W. This price jumped occurred due to demand and module shortages – either manufacturers were holding on stock or larger companies were buying up stock. Now let’s assume that $0.64/W is the base at which tariffs will be applied to. A 30% increase would result in a +$0.192/W increase, and this is not including the added costs of logistics and supply shortages.
Based on the NREL “Residential PV Price Benchmark Historical Trends”, we can infer that the recorded low of $2.80/W would jump back up to $2.992/W. Something to consider also is that these are national averages, so a $0.192/W increase could have a greater impact depending on the region. Based on other NREL work, there may also be significant differences in price between small and large installers.
Follow Up Actions:
Now that there is a decision in place, it is time to for the domestic solar industry to prove that it is here to stay. The Department of Energy has released “The American Made Challenge”, a competition for entrepreneurs to accelerate the U.S. module manufacturing industry. States and cities can also assist the industry through adding financial incentives, sparking innovations in research and business models, or providing low risk, low interest programs to go solar. Examples include Colorado’s C-PACE for commercial customers and RENU loan program for residential customers. End consumers should continue to support the solar industry by referring their installer and obtaining 2-3 quotes prior to purchasing.
 Lehmann, Jordan, Nedell, et al. (2017, Jan) Environmental Entrepreneurs. Clean Jobs Colorado. Retrieved from. https://www.e2.org/wp-content/uploads/2017/01/FINAL_CleanJobsCO.pdf
 Beebe, A. (2017, February) Small, Distributed Solar Companies Are Retaking the Industry. Here’s Wh. Retrieved from https://www.greentechmedia.com/articles/read/small-distributed-solar-companies-are-retaking-the-industry-heres-why#gs.XuDIG5M
 Pyper, J. (2018, Jan) Trump Administration Issues 30% Solar Panel Import Tariff. Retrieved from https://www.greentechmedia.com/articles/read/breaking-trump-admin-issues-a-30-solar-tariff#gs.lEsfBaQ
 Pyper, J. (2018, Jan) What India’s Solar Tariff Exemption Could Mean for the US Market. Retrieved from https://www.greentechmedia.com/articles/read/india-exempt-from-section-201-solar-tariffs#gs.mWv6fkU
Paula Mints. “Photovoltaic Manufacturer Capacity, Shipments, Price & Revenues 2016/2017.” SPV Market Research. Report SPV-Supply7. April 2017