Tag: tariffs

What Happens When the U.S. Solar Moratorium Ends?

Posted on by Mike Zimm

When the Biden administration implemented a tariff moratorium in June 2022 on solar panels and other products, the goal was to encourage more solar development while domestic producers and manufacturers could catch up.  

Fast forward nearly two years later, and the moratorium is about to expire. While some companies and industries have prepared for this day, others have been feverishly looking for alternatives. But with only a couple of months to go before new tariffs kick in, what can we expect to happen? 

The biggest questions we currently face are related to ongoing solar development. What will happen to current projects relying on foreign solar panels? Who stands to benefit most from reimplementing tariffs, and who could lose? How will disruptions like this impact our renewable energy goals?

How We Got Here 

The U.S. solar industry has been growing for years, mainly because of low-cost solar panels from China, but their relationship has had its difficulties. 

In 2012, the United States placed anti-dumping duties on Chinese photovoltaic (PV) panels containing crystalline silicon. Anti-dumping duties are a defense mechanism governments use to protect domestic producers from below-fair-market value products imported from overseas. 

Chinese manufacturers soon began moving their solar operations to Taiwan to avoid the tariffs. Not long after, in 2015, the U.S. expanded its duties to include Taiwan, too. 

By early 2022, the situation had bubbled into a full-blown problem. The U.S. Department of Commerce began investigating possible tariff circumvention by China through four additional countries, including Malaysia, Vietnam, Thailand, and Cambodia.  

One year later, the Commerce Department confirmed five companies out of eight investigated had circumvented anti-dumping duties. Other companies not under investigation at the time were also found to be skirting the tariffs.

So, Why Did We Issue a Moratorium? 

There has clearly been some bad blood brewing between the U.S. and China. But why did the U.S. issue a moratorium on solar panels, racking, and other components from Malaysia, Vietnam, Thailand, and Cambodia? 

Long story short – it had to. Thanks to the moratorium, solar projects could continue without delays. It also allowed the industry to keep growing while domestic production ramped up.  

The government also had time to investigate the circumvention allegations without handcuffing the solar industry during a vulnerable time.

The Sun is Shining for Solar. Why? 

By all accounts, 2023 was a fantastic year for solar generation. 

In 2023, the U.S. added more than 30 GWdc of solar power to the grid, accounting for more than half of all new electricity. But more solar power means more than just more electricity.  

Solar Energy Industries Association (SEIA) president and CEO Abigail Ross Hopper says solar energy generates tons of money through investments and jobs. 

“Nearly half of all solar capacity on the grid today has been installed in the last three years, generating over $120 billion of private investment and thousands of jobs across all 50 states,” Hopper explained. 

But a lot of importing had to happen to get to this point. In the first quarter to the third quarter of 2023, the United States imported about 40.6 GWdc of PV modules. In most cases, the panels were exempt from Section 201 duties, which protect domestic industries from import threats. 

Looking Ahead 

The SEIA forecasts another strong year for solar in 2024, though it will likely be less impressive than last year’s growth.  

Experts predict double-digit increases for commercial, community, and utility-scale solar this year, but residential install rates may slow. The organization attributes the potential slowdown to higher interest rates keeping homeowners on the sidelines until conditions improve.

  • Commercial – 19%  
  • Community – 15%  
  • Utility – 26%  
  • Residential – (13%) 

The states leading the charge are also the ones you would expect, with a couple of surprises. Texas, California, and Florida are sunny states with plenty of room for solar arrays. Colorado and Ohio, two surprising states making strides, are leveraging clean energy initiatives and solar-adjacent industries, respectively, to add renewable energy to the grid.

Solar Expansion Isn’t All Because of the Moratorium 

The moratorium affected the U.S. solar industry, but was it as significant as some may believe? 

It stabilized short-term supply chains for solar companies and allowed domestic producers to increase production. A steady supply of low-cost solar panels from Asia kept U.S. solar projects on time while preventing delays and cancellations that could have set the industry back. 

But the moratorium was only one piece of the solar puzzle. 

Price is generally an issue for new and emerging technology but is less problematic as it ages and improves. Solar panels are a prime example of this idea in action. Module prices have fallen 99.8% since 1976, including an astounding 15% per year between 2010 and 2020. 

Solar technology is getting better and more affordable every year, opening the door for mass adoption. 

But what good are solar arrays if communities and utilities have issues storing the vast amount of electricity produced? Utilities use fossil fuels when renewable energy sources like solar and wind are not generating enough power. As we move away from fossil fuels for renewable options, the need for battery storage becomes more critical. 

Battery storage costs have fallen at nearly the same pace as solar panels, slipping 85% over the course of a decade. Installing batteries to store electricity is becoming a more cost-effective solution for temporary increases in energy production.

Leaning Into Solar 

The hard costs of solar have long been a barrier to entry for solar companies, utilities, and homeowners. Luckily, the tide is turning and opening the door for more Americans, including those in smaller rural communities, to participate in low-cost electrical production. 

Hard costs have fallen steadily as technology, supply chains, and, most importantly, availability improve. At the same time, panel efficiency and battery storage are hitting record highs and showing no signs of slowing down. 

Unfortunately, unpredictable solar soft costs are a thorn in the side of utilities, companies, and community-scale solar projects. These costs are often difficult to gauge because different states have different permitting processes. Some states are also more solar-friendly than others.

Attractive Tax Incentives 

How does the government encourage more domestic manufacturing and renewable energy adoption in the U.S.? 

It all starts with making the right investments. 

Federal ITC (Investment Tax Credit) and PTC (Production Tax Credit) adders are an attractive incentive for solar companies and utilities. ITCs reduce upfront costs, making solar projects more affordable and helping generate profits faster. PTCs are more long-term incentives to encourage larger projects to help more consumers. 

Individual states, like Rhode Island, California, New York, Texas, and Florida, have many policies and incentives to spur solar projects. These can range from tax credits or deferrals to renewable energy certificates. Each incentive drives down investment costs while creating low-cost energy for consumers. 

Federal and state programs work together to promote cleaner sources of energy that generate electricity for consumers without raising electric bills. Consumers also have a say in renewable energy, opting for cleaner community-based options with fewer environmental impacts.

What Happens When the Moratorium Ends? 

June is quickly approaching, and with it comes the end of the solar panel moratorium. What happens after that is somewhat of a mystery. 

Prices will likely rise as the tariffs tack on more import taxes. Meanwhile, domestic production of photovoltaic cells, panels, and other solar system parts is starting to take off.  

There are currently 16 solar manufacturers in the U.S., including First Solar, the largest utility and community solar producer. The increase in domestic production has also brought in several large-scale international players, including QCells, whose solar panels are a leader in the residential market. 

The Supply Chain Could Hiccup 

The solar panel supply chain will not fall apart, but it could face strain caused by companies looking for other options. 

Why would companies look for other options if there isn’t a shortage of overseas panels? The panels may still be more cost-effective than U.S.-made ones, but tariffs, duties, and other taxes can drastically affect the cost of those PV products. 

Companies are always looking for more cost-effective solutions to bolster the bottom line. If doing business with Asia is too expensive, solar installers may consider using manufacturers in other countries. However, it takes time to set up new sources, which could add time to shipping and create delays. 

Domestic production would likely reduce supply chain delays eventually, but the products are more expensive. Companies also don’t have enough supply to address total demand – but that will change as more manufacturers come online. 

Although higher domestic prices seem similar to overseas tariffs, the shorter domestic supply chain reduces potential delays.

Short-term Struggles Lead to Long-Term Progress 

Ending the moratorium doesn’t mean U.S. solar companies will lose access to overseas solar panels and other products. 

If anything, it allows the U.S. to compete on a level playing field with other major exporters. Solar growth may slow in 2024 and even into 2025, but it will not be a death knell. Domestic manufacturing is rising, and the benefits far outweigh the perceived negatives. 

The United States has a lot riding on its renewable energy programs, including solar and wind. Developing and bolstering manufacturing tied to those industries helps us one day produce electricity without relying on traditional fossil fuels. It also opens the door for us to export our own products to other countries. 

We have a unique opportunity to address electrical grid reliability while reducing greenhouse gases. As with anything, it will take time, investment, and labor, but the country is making strides toward a cleaner future.

What Happens If the U.S. Reinstates Solar Panel Tariffs?

Posted on by Mike Zimm

For the most part, this has been a good year for the solar industry. 

The Inflation Reduction Act of 2022 (IRA) supercharged the industry, creating billions of dollars in investments. It also led to announcements of more than two dozen solar manufacturing facilities and 10 utility-scale battery storage manufacturing plants across the United States. 

The IRA isn’t the only thing adding fuel to the solar industry’s fire. Growth can also be attributed to the Biden administration’s 24-month moratorium on solar panels coming from four Asian counties. The move allows Cambodia, Malaysia, Thailand, and Vietnam to sell low-cost solar panels to U.S. companies and gives stateside producers time to ramp up production. 

A Bumpy Road 

While everything seems fine on the surface, solar installers face rising uncertainty from Congress. A bipartisan effort to reinstate the tariffs has moved through the House and Senate but was vetoed by Biden in mid-May. 

According to lawmakers, overturning the moratorium would be a rebuke of the Chinese government, spurring domestic production and investment. The problem is that reinstating the tariffs would potentially derail solar installations and investments without guaranteeing U.S. manufacturers can fill the void. 

What does reinstating tariffs mean for the rapidly expanding solar industry? Based on earlier experience, there are several things we can expect. 

Market Uncertainty 

When something changes in the market, everyone has to adjust. 

From a supply chain standpoint, reducing the flow of low-cost solar panels from Asia can delay projects. It also forces manufacturers to source materials elsewhere or jumpstart domestic production to keep shipping panels. 

Meanwhile, distributors must scramble to get the products they need for installers, who, in turn, struggle with having the right amount of labor available. The labor aspect is especially important. According to Abigail Ross Hopper with the Solar Energy Industries Association (SEIA), Congress’ move to overturn the moratorium could affect up to 30,000 jobs. 

Since the tariff decision was made last year, there has been a drastic increase in solar projects across the country. During COVID, supply chain issues created delays for many projects. With a wave of new panels, those installations have picked up again. It’s also encouraged other companies to make announcements for upcoming solar projects. 

The problem is reinstating the tariff. In a burgeoning industry like solar, market uncertainty can halt new investments. When companies can’t plan or forecast, they struggle to find the budget to complete projects. Then, they get delayed or shelved until market conditions improve. 

Strained Geopolitical Relationships 

One of the main reasons the solar panel tariff was introduced was due to an ongoing trade war with China. 

On several occasions, the U.S. has accused China of “dumping” materials into the American market, creating conditions that make it hard for domestic producers to compete. Dumping, as the name implies, occurs when a country sells raw materials, products, or other goods in another market at a low price, sometimes less than the cost to produce it. 

When dumping occurs, domestic producers are forced to sell their products at a higher price and potentially lose market share or lower prices to compete. In either case, it can hurt competition in the buying country’s market and disrupt the economy. 

U.S. officials believe China is going through Malaysia, Thailand, Cambodia, and Vietnam to skirt anti-dumping regulations and get solar panels into the U.S. market. Reinstating the solar panel tariff may not directly impact China, but could cause a rippling effect, further hurting the relationship between the two superpowers. 

There is one positive aspect to this situation, though. With tariffs on solar panel imports, domestic producers will have room to ramp up production to meet clean energy demand. 

Higher Short-Term Pricing 

When there’s less product to go around, prices naturally rise. 

Shortly after President Biden suspended solar panel tariffs, companies jumped at the opportunity to buy low-cost panels from overseas. Prices dropped because there was enough supply to meet growing demand in the U.S. Unfortunately, that would change if tariffs were reinstated. 

Think of it this way: eggs are typically cheap and don’t often fluctuate in price because demand is generally constant, as is supply. But earlier this year, prices skyrocketed after avian flu reduced the number of eggs produced while demand was unchanged. As egg producers fought to catch up, the cost of eggs exploded by double digits, with people sometimes paying $5 or more per dozen. Today, prices are slightly higher than last year, but we’re nearly back to equilibrium. 

So, let’s use the same supply and demand lens on the solar panel situation. What would happen if the steady supply of low-cost panels became severely restricted? In the short term, prices would spike as supplies dwindled and demand stayed high. Prices will jump if domestic producers and manufacturers in other countries don’t fill the immediate void. 

Once manufacturers in the U.S. increase their output, costs will come down until reaching an equilibrium price. 

More Domestic Investment 

Although having an influx of solar panels is great for the burgeoning solar industry, Congress has a good reason for reinstating the tariffs; legislators want to see domestic producers in control. 

For all intents and purposes, the White House has promoted green energy economic development across the board, not just solar. The Inflation Reduction Act (IRA) has been a boon for solar and other renewables, resulting in $150 billion in capital investments across many clean energy projects. 

It’s about more than simply making more panels and parts, though. Every investment in renewable development in the U.S. is an opportunity to create thousands of high-paying jobs in an expanding industry. Without a steady stream of utility-scale solar products, companies can’t predict labor needs. 

More production also gives the U.S. a chance to meet its high-level sustainability goals. According to the White House, the U.S. wants to reach 80% renewable energy generation by 2030 and 100% carbon-free electricity by 2035. They’re lofty goals, especially when nearly 80% of our energy was generated by fossil fuels in 2021. 

With more investment in renewable energy, there is a chance to turn the tide. According to the EIA (Energy Information Administration), total solar generation share could double from 3% in 2022 to 6% by 2024, thanks to lower production and installation costs combined with tax credits and other incentives. 

Where Do We Go from Here? 

No matter what happens with the tariffs, it’s important to remember the moratorium was only temporary. 

The stay was meant to give solar installers, companies, and utilities time to complete projects, increase production, and build a thriving U.S. solar market. Two years may not cover a manufacturer’s ramp-up timeline, but it gives installers time to work on projects while they get up to speed. 

It’s also worth noting that although tariff relief supports low-cost solar panels, the IRA has been doing the heavy lifting to create investment and manufacturing opportunities for companies. 

Repealing tariff relief on solar panels now may be a minor setback, but it shouldn’t cloud our view of what has been done so far. American manufacturing is growing, with companies like Sun-Pull producing critical infrastructure like bundled PV wire. Other companies are coming online soon, joining manufacturers who have found footing in the space, making panels and Balance of System (BOS) items. 

Renewable energy, including solar, is the future, but how we approach the coming years depends on our commitment to green energy and divesting from fossil fuels.  

Anything is possible, but we need to move quickly.

Production, Labor, and Land: The Push for Solar Energy

Posted on by Mike Zimm

You’ve probably seen renewable energy, including solar, receiving large-scale investments lately. 

It’s no surprise the solar industry is growing, especially given the world’s push to curb climate change. The U.S. solar market currently totals $35 billion and generates about 5% of our country’s electricity – nearly 11 times more than a decade ago. The trend is expected to continue, thanks to recent actions from the Biden administration, including the recently passed Inflation Reduction Act (IRA). 

The government’s actions are spurring excitement in the industry. Solar manufacturers are announcing large-scale production investments, including Qcells, Enel, Maxeon, and CubicPV. These projects are expected to increase domestic solar production more than five times, expanding from 7GW to more than 42GW. 

Though the IRA encourages companies to invest in renewable energy, the changing geopolitical climate plays a vital role. In 2022, a 24-month tariff moratorium was announced for solar panels coming into the U.S. from four Asian countries, including Cambodia, Malaysia, Thailand and Vietnam. The stay allows U.S. companies to import low-cost solar panels from Asia while giving domestic manufacturers time to increase production. 

The utility-scale solar growth has been nice, but there are still barriers to success, including: 

  • Reliance on imports 
  • Permitting and regulatory red tape 
  • Ongoing labor issues 
  • Public skepticism of solar power 

Combatting these issues may supercharge the clean energy industry and allow for more utility-scale solar power domestically. 

Fewer Imports, Better Results 

China is a key player in the solar energy industry. Not only does it produce a large number of low-cost solar panels, but it’s also a leader in energy storage. 

Although China’s solar panels are inexpensive, they come at a cost. There are questions about the country’s skirting of duties applied to them, and their low cost has made it difficult for domestic manufacturers to compete. 

COVID also showed us that supply chains can be easily disrupted, making getting supplies quickly or reliably harder. 

Recent developments like the IRA may reduce U.S. reliance on other countries. Contrary to what that sounds like, it doesn’t mean the U.S. is cutting China or any other country out. We’re simply narrowing the supply chain and bringing more production stateside. 

Since the IRA became law, innovative companies have jumped in to support solar expansion, committing to producing everything from modules and inverters to batteries, copper foil, and photovoltaic (PV) wire. Even structural products like racking and trackers are showing signs of increased production as manufacturers take advantage of the changing business climate. 

Unfortunately, we can’t flip a switch and immediately start production. It can take months, even years, for production facilities to come online. However, the hope is that with enough lead time to get production moving, the U.S. can become competitive in the solar space. 

Streamlining the Permitting Process 

Let’s be honest; the government is a lot of things, but fast isn’t usually one of them. Despite the Biden administration helping installers get low-cost panels and freeing up billions of dollars to promote renewables, there’s more to do. 

The permitting process is different depending on where the installers are. Even the Environmental Protection Agency (EPA) has called the permitting process a “patchwork” of regulations varying from state to state. 

To make the process smoother, the EPA introduced a toolkit to help developers, utilities, and communities navigate regulations, secure financing, and troubleshoot issues. But organizations like the SEIA are calling for more permit reform. In their eyes, reducing red tape adds jet fuel to a burgeoning industry, opening the door for more jobs, revenue, and opportunity. 

Although there have been attempts to streamline the building process for companies to set up distributed energy systems, none have succeeded. For example, the bipartisan American Energy Opportunity Act of 2019 bill called on the Department of Energy (DOE) to designate a board to help qualify communities with solar systems and certify installers in the space. It died without a vote or any other action. 

Establishing Better Career Promotion and Labor Relations 

As with any growing industry, thousands of skilled and unskilled jobs are available. The problem is finding enough people to meet increasing needs. 

Unskilled labor is in high demand, but so is the need for electrical, process, and chemical engineers, scientists, architects, physicists, planners, and more. The jobs are certainly available, more so with the increased focus. 

More than 250,000 people work in the solar industry, with job growth in 47 of 50 U.S. states. Among them, California, Texas, New York, and Florida are at the forefront of hiring and employment. Even states traditionally tied to fossil fuels are beginning to lean into solar. 

The labor shortage doesn’t have to cripple solar. If private companies, utilities, colleges, and governments collaborate, it simplifies recruiting efforts and builds industry interest early on. Training programs, apprenticeships, and veterans programs are only a few ways to introduce new workers to renewable energy occupations. 

Creating Positive Perceptions 

For some people, solar is the future of electrical energy and a way to rely less on fossil fuels. Others see PV panels as another way to muck up a hillside view. 

Solar has plenty going for it, but it also has its fair share of detractors. Often helmed by rural mobilization efforts, arguments range from deforestation fears and aesthetic issues for homeowners to agricultural concerns. The truth is that solar installations aren’t nearly the nuisance people think they are. 

Think about the last time you looked at a swamp and thought, “Wow, what a great place to build!” Solar sites aren’t typically found where other development is attractive or possible.  

Swamps, steep hillsides, and farmland are great locations for utility-scale solar installations because they don’t interfere much with our daily lives. For example, one Sun-Pull solar installation is tucked in behind a correctional facility. Another is in what used to be an unused swamp area off a busy road. 

In the case of farmland, agrivoltaics is literally changing the solar landscape. Recent studies have shown that combining solar panels with grazing areas or cropland can benefit both the land and the panels. Unlike other solar installations, which only serve one application, agrivoltaics let property owners use the land while leasing it out. 

What’s important to remember is that education breeds awareness, especially in communities where solar is a practical solution. Better access to tools and information can alleviate concerns and encourage residents to learn more about community and utility-scale solar. 

Solar Goes Mainstream 

This is an exciting time to be in the solar industry, but there’s still more to do. 

The industry needs continued investment from private and public sources. An influx of money will spur production, job growth, and energy reliability as the world turns more toward renewables. 

Solar manufacturing and installation jobs pay well, have job security, and can help revolutionize the electrical utility industry. More workers also push innovation, better designs, and increased interest in revamping the electrical grid. 

Solar power is the future of energy. As installed capacities increase and technology improves, getting much of our energy from the sun, wind, and water will become commonplace. But it’s not all about getting away from fossil fuels; this is a move toward unlimited sustainable, clean energy. 

The renewable revolution is here. With a sustained effort, the U.S. is more than capable of reaching its lofty energy production goals.

5 Solar Trends We’re Watching in 2022 and 2023

Posted on by Mike Zimm

The solar industry is growing by leaps and bounds, leaving many to wonder what the next phase of growth might look like and when it could arrive. 

President Joe Biden has expressed the need for more renewable energy to meet the country’s ambitious environmental plans. The ultimate goal is to move to a completely decarbonized energy sector by 2050, but the United States will need a massive boost from its sustainable energy producers like wind, hydro, and solar power. 

So what exactly does the future look like for solar? We’ve highlighted the five biggest solar power trends we think will influence the rest of this year and into 2023, and it’s a mixed bag. Some of what we’re seeing is incredibly encouraging, while other aspects give us some reason for short-term concern. 

From the supply chain to overseas tariffs, these are the five biggest trends we’re watching this year. 

The Supply Chain is Dictating Solar Costs 

Unfortunately, the world has not recovered from the COVID-19 pandemic nearly as quickly as we had hoped for. 

China’s on-again-off-again lockdowns have caused starts and stops in many manufacturing supply chains, resulting in lower availability of goods. Labor issues in the U.S. mean there aren’t enough dock workers and truck drivers to move raw and finished materials from ports, creating additional supply chain bottlenecks. 

The lack of manufacturing production combined with less labor means that are fewer products available, leaving companies and utilities scrambling to source everything from solar panels and batteries to copper wire. These unintended shortages and delays have put the brakes on some utility solar projects, with some utility scale solar projects facing delays ranging from a couple months to next year. 

According to the SEIA, solar prices were up 18% in 2021, though the spike can’t solely be attributed to a shaky supply chain (more on this topic later). The organization went on to say that about one-third of 2021’s Q4 capacity was delayed by a quarter, while about 13% of capacity slated for this year has been pushed back at least a year, or cancelled entirely. 

The supply chain’s struggles are now becoming the entire industry’s problems. Short-term solar forecasts are down by nearly 20%, and reports suggest the industry could grow about 25% less than expected this year. 

It’s not all bad news. Even with the pandemic, utility scale solar power costs dropped going into 2021, falling by about 12%. Short-term spikes in the cost of materials, including those used to make the panels, threaten to erase those cost savings, though relief seems to be on the way from the Biden administration. 

The Solar Industry Is Dealing with Tariffs Galore 

For several years, China has found itself the subject of anti-dumping regulations from the U.S. Simply put, dumping is what happens when a company offloads its product in another country for much cheaper than they would in their home country. According to the U.S., companies in China has been selling their solar technologies at a very low cost, making it harder for companies domestically to compete. 

To fix the issue, the U.S. assigned tariffs to Chinese and Taiwanese solar panels in 2014, increasing prices by 50%. Chinese companies, though, may have used a loophole to avoid tariffs and still get their products into the U.S. by establishing companies in other countries like Malaysia, Thailand, Vietnam, and Cambodia and sending products to the U.S. tariff-free. 

Today, more than 80% of the most popular solar modules come from those four countries. That means most of the panels used on utility sites in the U.S. are primarily coming from Asia, and most likely from a China-based company. In 2018, then President Trump instituted tariffs to increase the cost of manufactured products coming in from those countries. 

Most recently, the U.S. Department of Commerce began looking into solar cell imports from Malaysia, Thailand, Vietnam, and Cambodia to assess whether dumping had occurred, but in early June, President Biden issued an announcement that it wouldn’t impose new tariffs on solar imports for two years. The move is expected to help get utility solar projects across the country back on track as soon as possible. 

Long-term Solar Costs Will Decrease 

Solar is already among the cheapest energy producers available today, but as production costs continue to drop and panel prices become cheaper and more efficient, it could open up more avenues to expand solar systems across the country. 

As recently as 2020, electricity produced by utility-scale solar cost about 5 cents per kWh. The cost dropped to 3.5 cents per kWh in the most optimized regions. The hope is that solar panels become more efficient, while the costs of modules and BOS systems keep dropping. 

So far the trend has held up. From 2010-2020, the cost of a utility PV solar system dropped by more than 80%. Despite a short-term increase in prices due to the pandemic, supply chain issues, and tariff concerns, overall trends show on-site project costs continuing to fall as more efficiencies are found. 

For its part, Sun-Pull Wire is continuously working to revolutionize how PV wire is installed on utility scale systems. Sun-Pull’s cable solution, for example, cuts down on overall labor costs and project time by allowing a team of 3 to 4 people to install 1mW of string PV wire per day. Compared to single wire pulls, Sun-Pull’s PV wire can cut installation times by nearly 80%. 

Faster installation times means more work gets done faster, increasing overall productivity of on-site teams, which helps companies address labor shortages or take on more projects with the labor they have. 

Labor Shortages Are a Threat 

Like many industries, solar energy is also facing a worker shortage. 

Projections for the solar industry are positive, with estimates suggesting 1.5 million people could be employed by 2035, but in 2020 the industry only clocked about 231,000 workers – less than before the pandemic. To meet the Biden administration’s aggressive clean energy goals, it’s estimated that solar companies will need to employ about 900,000 workers. 

With that said, productivity was still up and the hope is that the industry will continue its rapid ascent as more companies come online. As more projects are completed and adding power to the grid, SEIA believes annual growth will stay strong, but is somewhat dependent on the supply chain. Despite a shaky supply chain, the group says there is a lot of demand for solar and it will remain popular in the coming years. 

The U.S. Bureau of Labor Statistics (BLS) agrees. As the country moves away from traditional fossil fuels for energy, the agency says solar, wind, and other renewables will need to step up to fill the gap. 

The industry is also moving quickly to meet anticipated demand. Companies like Sun-Pull are solar innovators, finding ways to create cost savings for solar workers and energy providers. Sun-Pull’s bundled cable solutions allow even inexperienced workers to move more quickly and install PV wire to panels much faster than traditional single-pull methods. 

Faster set-ups mean fewer people are needed on the job site, saving time, money, and manpower along the course of each utility-scale PV wire project. 

Better PV Modules and Outputs Are Coming 

In 2021, utility-scale solar produced nearly 114 million kWh, reflecting nearly 30% growth over the previous year. We expect outputs to keep increasing as more projects are added to the grid. 

This coincides with other advancements in solar technology meant to increase energy production and efficiency. So far, the highest efficiency a solar panel has recorded is 47%, though most solar panels on the market today hover in the 20s. However, multijunction solar cells tend to perform better than other types. 

Increasing efficiency is an important aspect of reaching our energy goals and there are several ways to make it happen. This can be done in a few different ways: 

  • Better thermal management – This will help solar panels perform better in colder environments. 
  • Minimize reflection – This requires non-reflective colors and coatings or using a textured surface to keep prevent solar rays from bouncing. More captured light means more efficiency. 
  • Reducing recombination – Recombination occurs when electrons return to their regular valence band. Companies can reduce recombination by cutting down panel impurities and other defects. 

Where Does Solar Go from Here? 

The goal is for solar energy to eventually replace traditional power plants. While it’s certainly within reach, the industry has some catching up to do. 

Solar PV energy is here to stay. Like wind, the Sun is an ultimately renewable resource that has the potential to create an incredible amount of electricity, especially in areas where the sun shines consistently. It also stands to benefit from continued enhancements, making panels and systems more reliable, efficient, and longer lasting. 

Recent actions, including a moratorium on new tariffs, will go a long way toward making life a bit easier for solar companies. With fewer roadblocks and a slowly improving supply chain, the entire solar industry is poised for massive growth in the coming years. 

We’re excited for the future and can’t wait to be a part of the solar revolution!

What Do Tariff Suspensions Mean for U.S. Solar Energy?

Posted on by Mike Zimm

Business is looking a little sunnier for U.S. companies, thanks to several encouraging announcements from the White House. 

In June, President Joe Biden announced a 2-year exemption for solar imports, lifting restrictions on solar products coming in from four Asian countries; Cambodia, Malaysia, Thailand, and Vietnam. The announcement follows in the footsteps of an investigation launched in March regarding anti-dumping regulations imposed by the U.S. on China several years ago. Although the tariff exemption is big news, it does not apply to China or Taiwan, which both still have their tariffs in place. 

Asia is a massive player in the solar panel industry. In fact, upward of 80% of the solar panel imports come from Asia, meaning that America’s solar goals are somewhat contingent on having a relationship with our overseas trading partners. Pausing tariffs on incoming solar panels helps utilities and other companies that had paused their plans to restart the process. 

Besides the exemptions, the Biden administration also invoked the Defense Production Act (DPA). This opens the door for additional government investment in clean energy projects, including solar. According to the Department of Energy (DoE), this money is for companies to expand clean energy manufacturing, build new facilities, and help consumers access greener products. 

The hope is that with more investments, U.S.-based companies can boost domestic solar panel production so the country can rely less on imports. As the DPA effort ramps up, the 2-year tariff will serve as a temporary solution to give domestic manufacturers a chance to make enough supplies to catch up to what is imported. 

Who Stands to Win with Tariff Exemptions?  

As with any governmental announcement, there will be winners and losers. In this case, several clear winners emerge in the near- and long-term.  

Domestic Companies with Solar Projects  

Tariffs have a contentious and complicated history in the United States, often acting as a defensive mechanism used by countries to protect domestic manufacturing. Unfortunately, what typically happens is that consumers get saddled with higher prices associated with the tariffs, and production doesn’t always keep up. 

With solar tariffs in place, products like solar panels become more expensive, making it harder for companies to fund previously planned projects. As a result, some planned projects were either delayed or outright canceled.  

According to the Solar Energy Industries Association (SEIA), the organization cut its solar installation forecast by half in 2022, mainly due to supply chain issues and uncertainty related to the government’s investigation into possible Chinese anti-dumping tactics.  

By cutting at least a little of the bureaucratic red tape, the U.S. is giving domestic companies a chance to complete their solar projects with fewer costs and more certainty. Although the eased restrictions aren’t going to bring back previously canceled projects, there is a chance that delayed projects could get back on track.  

The move can’t come soon enough, either. SEIA recently reported about half of all energy added to the grid in the first quarter of 2022 was solar, so there is an appetite for renewable technology. 

Domestic Solar Manufacturers  

Although the tariff exemptions are meant to ease import costs for solar panels, the activation of the DPA is designed to spur solar manufacturing stateside. 

The White House announced in June with additional government support, domestic solar manufacturing was on pace to triple in 2024, going from a current manufacturing capacity of 7.5 gigawatts to 22.5 gigawatts by the end of 2024. This would be enough production capacity to help more than 3 million homes convert to solar energy production annually. 

June’s DPA announcement bolsters the production of several solar components, including photovoltaic (PV) modules. The resulting products will give companies domestic options that don’t need to be imported or subject to tariffs. The announcement and expected production increase is also fantastic news for companies that produce other solar components used in solar arrays, including Sun-Pull. Our wire is used to string solar panels together, letting generated electricity flow back to the combiner box. 

Perhaps the best part of the tariff exemptions and DPA announcement is that thousands of jobs associated with the solar industry won’t be eliminated. There’s even optimism that solar jobs will increase due to more projects. 

Although this is fantastic news for stateside manufacturers, there’s some reason for concern. It’s worth knowing that earlier tariffs imposed to bolster domestic manufacturing have not always resulted in increased production. 

The Environment  

It’s no secret the United States has climate goals it wants to reach in the coming years, including a series of renewable energy benchmarks in 2035. 

The first quarter of 2022 was not particularly great for utility solar energy as only 2.2 GWdc was installed. According to SEIA, it was the weakest quarter of growth in two years and was a far cry from what was considered a strong finish during the final quarter of 2021. 

Adding to the problem is the March investigation into China possibly skirting anti-dumping regulations by sending materials to other Asian countries. A month before, Auxin Solar, a small manufacturer, asked the government to investigate the situation, leading to even more uncertainty. The political climate made moving forward with some projects risky, leading to 17.6 GWdc worth of solar projects becoming delayed by a year and another 450MW canceled. 

Fewer tariffs, on the other hand, mean domestic companies can once again import low-cost solar panels to complete their projects. It also means current projects can proceed as scheduled with fewer delays, and new projects can get off the ground to bring more solar energy online. 

More solar energy is great news for the environment because it lessens our dependency on fossil fuels and other carbon dioxide-emitting power sources. Of course, ramping up the solar industry isn’t like turning on a faucet. It will take months, if not years, to get back up to speed. However, the tariff exemption may go a long way toward getting us started until domestic manufacturers can catch up and bring their own products to market. 

What Do We Expect?  

It’s tough to look at the tea leaves and find a definitive answer to what we think might happen. Still, the tariff exemptions are a good sign for Sun-Pull and the entire solar industry. 

Removing tariffs for a few countries doesn’t fix all the issues we’re currently facing. It won’t be easy for domestic manufacturers to compete with low-cost imported options overseas, but it can be done. The announcements do give manufacturers a much-needed fighting chance, allowing them to meet increased solar needs from a growing number of Americans. 

Companies like Sun-Pull Wire are poised to make the most of solar’s growth, with bundled wire systems that will carry the future of energy to millions of Americans across the country. We’re looking forward to seeing brighter, cleaner, and more sustainable energy take the next step.