Business News June 7, 2018 / 5:08 AM / in 3 hours Billions in U.S. solar projects shelved after Trump panel tariff Nichola Groom 9 Min Read (Reuters) - President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters. FILE PHOTO: Solar panels covering 900 acres are seen at the Comanche Solar facility in Pueblo, Colorado, U.S., April 6, 2016. REUTERS/Rick Wilking/File Photo That’s more than double the about $1 billion in new spending plans announced by firms building or expanding U.S. solar panel factories to take advantage of the tax on imports. The tariff’s bifurcated impact on the solar industry underscores how protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition. Trump’s steel and aluminum tariffs, for instance, have hurt manufacturers of U.S. farm equipment made with steel, such as tractors and grain bins, along with the farmers buying them at higher prices. White House officials did not respond to a request for comment. Trump announced the tariff in January over protests from most of the solar industry that the move would chill one of America’s fastest-growing sectors. Solar developers completed utility-scale installations costing a total of $6.8 billion last year, according to the Solar Energy Industries Association. Those investments were driven by U.S. tax incentives and the falling costs of imported panels, mostly from China, which together made solar power competitive with natural gas and coal. The U.S. solar industry employs more than 250,000 people - about three times more than the coal industry - with about 40 percent of those people in installation and 20 percent in manufacturing, according to the U.S. Energy Information Administration. “Solar was really on the cusp of being able to completely take off,” said Zoe Hanes, chief executive of Charlotte, North Carolina solar developer Pine Gate Renewables. GTM Research, a clean energy research firm, recently lowered its 2019 and 2020 utility-scale solar installation forecasts in the United States by 20 percent and 17 percent, respectively, citing the levies. Officials at Suniva - a Chinese-owned, U.S.-based solar panel manufacturer whose bankruptcy prompted the Trump administration to consider a tariff - did not respond to requests for comment. Companies with domestic panel factories are divided on the policy. Solar giant SunPower Corp (SPWR.O) opposes the tariff that will help its U.S. panel factories because it will also hurt its domestic installation and development business, along with its overseas manufacturing operations. “There could be substantially more employment without a tariff,” said Chief Executive Tom Werner. For a related graphic, click tmsnrt.rs/2LjM1RQ Slideshow (3 Images) LOST PROFITS, JOBS The 30 percent tariff is scheduled to last four years, decreasing by 5 percent per year during that time. Solar developers say the levy will initially raise the cost of major installations by 10 percent. Leading utility-scale developer Cypress Creek Renewables LLC said it had been forced to cancel or freeze $1.5 billion in projects - mostly in the Carolinas, Texas and Colorado - because the tariff raised costs beyond the level where it could compete, spokesman Jeff McKay said. That amounted to about 150 projects at various stages of development that would have employed three thousand or more workers during installation, he said. The projects accounted for a fifth of the company’s overall pipeline. Developer Southern Current has made similar decisions on about $1 billion of projects, mainly in South Carolina, said Bret Sowers, the company’s vice president of development and strategy. “Either you make the decision to default or you bite the bullet and you make less money,” Sowers said. Neither Cypress Creek nor Southern Current would disclose exactly which projects they intend to cancel. They said those details could help their competitors and make it harder to pursue those projects if they become financially viable later. Both are among a group of solar developers that have asked trade officials to exclude panels used in their utility-scale projects from the tariffs. The office of the U.S. Trade Representative said it is still evaluating the requests. Other companies are having similar problems. Scott Canada, senior vice president of renewable energy at solar project builder McCarthy Building Companies, said his company had planned to employ about 1,200 people on solar projects this year but slashed that number by half because of the tariff. Pine Gate, meanwhile, will complete about half of the 400 megawatts of solar installations it had planned this year and has ditched plans to hire 30 permanent employees, Hanes said. The company also withdrew an 80-megawatt project that would have cost up to $150 million from consideration in a bidding process held by Southern Co (SO.N) utility Georgia Power. It pulled the proposal late last year when it learned the Trump administration was contemplating the tariff. “It was just not feasible,” Hanes said. STOCKPILING PANELS For some developers, the tariff has meant abandoning nascent markets in the American heartland that last year posted the strongest growth in installations. That growth was concentrated in states where voters supported Trump in the 2016 presidential election. South Bend, Indiana-based developer Inovateus Solar LLC, for example, had decided three years ago to focus on emerging Midwest solar markets such as Indiana and Michigan. But the tariff sparked a shift to Massachusetts, where state renewable energy incentives make it more profitable, chairman T.J. Kanczuzewski said. Other developers are forging ahead, keen to take advantage of the remaining years of a 30-percent federal tax credit for solar installation that is scheduled to start phasing out in 2020. Some firms saw the tariff coming and stockpiled panels before Trump’s announcement. 174 Power Global, the development arm of Korea’s Hanwha warehoused 190 megawatts of solar panels at the end of last year for a Texas project that broke ground in January. The company is paying more for panels for two Nevada projects that start operating this year and next, but is moving forward on construction, according to Larry Greene, who heads the firm’s development in the U.S. West. Intersect Power, a developer that cut a deal last year with Austin Energy to provide low-cost power to the Texas capital city, is also pushing ahead, said CEO Sheldon Kimber. But the tariff is forcing delays in buying solar panels. The 150-megawatt project is due to start producing power in 2020. Waiting until the last minute to purchase modules will allow the company to take advantage of the tariff’s 5-percent annual reductions, he said. ‘A LOT OF ROBOTS’ Trump’s tariff has boosted the domestic manufacturing sector as intended, which over time could significantly raise U.S. panel production and reduce prices. Panel manufacturers First Solar (FSLR.O) and JinkoSolar (JKS.N), for example, have announced plans to spend $800 million on projects to increase panel construction in the United States since the tariff, creating about 700 new jobs in Ohio and Florida. Just last week, Korea’s Hanwha Q CELLS (HQCL.O) joined them, saying it will open a solar module factory in Georgia next year, though it did not detail job creation. SunPower Corp, meanwhile, purchased U.S. manufacturer SolarWorld’s Oregon factory after the tariff was announced, saving that facility’s 280 jobs. The company said it plans to hire more people at the plant to expand operations, without specifying how many. But SunPower has also said it must cut up to 250 jobs in other parts of its organization because of the tariffs. Jobs in panel manufacturing are also limited due to increasing automation, industry experts said. Heliene - a Canadian company in the process of opening a U.S. facility capable of producing 150 megawatts worth of panels per year - said it will employ between 130 and 140 workers in Minnesota. “The factories are highly automated,” said Martin Pochtaruk, president of Heliene. “You don’t employ too many humans. There are a lot of robots.” Reporting by Nichola Groom; Editing by Richard Valdmanis and Brian Thevenot
"I eagerly await the administration’s regulations protecting pagers, fax machines, and Blockbuster," Arnold Schwarzenegger. Our Best Plan: We should encourage free trade and technological advances while going to the mat to help those who become road kill.
We should build companies here in the USA to make solar panels, whole point of giving corps 15% cut on taxes. I know people working 4 part times jobs to make ends meet, yeah they have jobs but to four of anything is dumb. Florida the sunshine state but horrible at finding work, they have older generation and juice, but not much industry, if you not doing coal in West Virginia, you on disability cause not much there for jobs. We screwed ourselves long ago by buying from China, time to turn the tables.
Let me ask you an honest question. If you have an industry that makes a relatively raw product that creates 100 jobs, and and industry that primarily uses that product that has 1,000,000 jobs, would you advocate for losing half of the million jobs to get the 100 manufacturing jobs? That's exactly the case with things like steel and solar panels. Building solar panels is largely automated and involves very few jobs. It also involves almost no profit, so not even the companies making solar panels, regardless of where they are in the world are making much money. Installing those panels, on the other hand, is very labor intensive. And it's almost entirely trades and unskilled labor. You're advocating for losing thousands and thousands of jobs to possibly create a handful. Plus make electricity more expensive for everyone. How does that make any sense at all, especially given your comments on the need for jobs?
Then if it is so few jobs as you say which it isn't 100 jobs as this would be one plant as I could never see USA having one of anything, why did they go overseas to allow our enemies to gain dollars and we increase our debts to them? And it is like everything else China and other countries have gotten rich cause we have a weak government always looking to line their pockets. And you actually think many of the laborers putting in all those panels are legal Americans? The buck has to stop somewhere and now is as good as any time. If they can't get product from overseas, want to bet they be producing them here next year? Free trade was supposed to be honest trade and unless you force people, they will not make changes. USA is not number one in the world, we lost that when Sam Walton died in the 90s, let China go back to days of old, they building warships with our flipping money !!!
Do you or do you not agree that the ratio of jobs building solar panels to jobs installing solar panels is something on the order of 1:100? Hopefully you understood my numbers were for illustrative purposes, if not let me make that explicit but let me also make explicit that the ratio is listed above is accurate. So for every 1 job you're "creating" by forcing manufacturing of solar panels in the U.S. you're destroying some significant portion of the 100 jobs in installation. For arguments sake let me say it's as low as 5, i.e. for every job you create you destroy 5 (it's really quite a bit higher). No need to get bogged down in a bunch of jingoistic 'Murica is great bullshit, I served my country for 20+ years and don't need a information free lecture about that from someone who didn't. Stick with the initial facts, do you or do you not think that it makes sense to destroy >1 job to create 1 job? Simple question, you seem to like to reduce nuanced topics to simplistic answers, so again, how can you support that?
Since you bought up being in the military, I did 3 years with the Army, and 17 years traveling the world for another government agency till I got disabled and seen enough shit in my life so I don't need to bogged down by free lectures from other people. Let's look at early 1900's, if times had not changed AND forced by the government, people be working 12 hours a day plus for slave wages and often times of death. At this time in our lives, this is right President to put on tariffs to make changes so later on Americans will still have our way of life. You don't like this answer, you can ... We are going to have to agree to disagree or not.
You're posts are devolving to make less and less sense. If you don't agree that 5 jobs are better than 1 job and can't articulate anything then yes, it's not with wasting the time on a conversation.
Why is it China has tariff of 25% of automobiles we send them? and they have invested a billion dollars in Detroit area. https://www.csmonitor.com/USA/2013/...ping-up-its-presence-in-Detroit-auto-industry So what there is a 30% tariff, people will end up paying more if they want it and one day China will have plants over here making solar panels. And I didn't ask for a conversation with the likes of you.