Solar developers hoard panels as US tariff threat looms

Bloomberg

Solar developers are suspending construction as the looming threat of US import tariffs
has driven up prices and spurred hoarding, crimping panel supplies.
“We’ve had roughly $500 million worth of work that we’ve had to put on hold,” said Scott Canada, who oversees renewable energy projects for McCarthy Building Cos. of St. Louis. “The supply of panels has just evaporated as everybody is grabbing what they can.”
The disruptions date to about May, after bankrupt panel manufacturer Suniva Inc. filed a trade complaint asking for protection from cheap imports. As the case gained steam, developers rushed to stockpile every available panel. The case is currently before the US International Trade Commission and may eventually reach the Oval Office, where President Donald Trump has the authority to impose tariffs. The crunch is an abrupt reversal for the $29 billion US solar industry, which six months ago was awash in inexpensive panels. Developers say prices have swelled by about 40 percent in the past four months, making some projects uneconomical to build. And that’s if they’re lucky enough to have a supplier at all.
“If you don’t have panels lined up for ‘17 than you aren’t going to get them,” said Laura Stern, president and co-founder of Nautilus Solar Energy LLC
in Summit, New Jersey. “The market is really tight.”
Solar manufacturing is dominated by companies in China and elsewhere in Asia, where intense competition and booming output helped drag down global prices more than 50 percent in five years. While those declines have been a boon for companies that build solar farms, they’ve squeezed panel makers in markets with higher labor costs, including the US.
Georgia-based Suniva, which filed its trade case in April, is asking for tariffs that may double the price of panels in the US The trade commission has until Sept. 22 to investigate the case and send its findings to Trump, who gets final say.
“We’ve got our fingers crossed that smarter minds will prevail and we won’t wind up with tariffs,” said Andrew
Giraldo, president of engineering, procurement and construction at National Renewable
Energy Corp. of Charlotte, North Carolina.
Solar developers have vociferously opposed Suniva’s trade complaint, saying tariffs on cheap imports will hobble demand for new installations and eliminate thousands of jobs. The case has also drawn criticism from free-market trade groups, including the R Street Institute, National Taxpayers Union, American Legislative Exchange Counsel and others who released a letter urging the trade commission to reject Suniva’s plea.
“While we oppose government policies that pick winners and losers in the energy marketplace, we are equally hostile to protectionist trade measures that distort markets and invite retaliation by our trading
partners,” the groups wrote.
Panels account for about 40 percent of the cost of solar farms, and even modest price swings can drag a project underwater. Before the Suniva complaint, panels were selling for about 32 cents a watt in the US Now developers say they are paying as much as 45 cents. That drove up the global average price last month by the most in more than two years.
Suniva’s trade case isn’t the only reason for the shortage.