Jan 23, 2018

Trump's solar penalties are lighter than the industry feared

Employee from a Radian Generation's operations and maintenance team at the family-owned Knowlton Farm in Grafton, Massachusetts. Photo: Robert Nickelsberg / Getty Images

The conventional wisdom quickly hardening around the White House decision to impose four years of tariffs on imported solar panel equipment is that it will likely slow solar power deployment to some degree, but is not nearly as aggressive as developers and their allies feared.

Why it matters: The solar trade case has been among the biggest energy policy battles of the young Trump administration and, more broadly, is an early test case of President Trump's willingness to translate his hawkish trade stance, especially toward China, into firm policy.

"The bottom line is it could have been much worse," Ethan Zindler, a top analyst at Bloomberg New Energy Finance, tells Axios.

ICYMI: Yesterday the White House announced 30% tariffs on imported solar cells and modules that decline by 5% annually to 15% in the final year, with 2.5 gigawatts worth of cell imports exempted.

What we're hearing: Goldman Sachs analysts, in a note late last night, predicted a "relatively benign" impact — they see a "potential 3%-7% cost increase for residential and utility-scale solar costs, respectively," with a declining effect as the penalties lessen.

And here's the firm ClearView Energy Partners in their initial report last night:

  • "At first blush, it appears that internationalist, free-market advocates within the Administration may have successfully redirected the President away from more aggressive trade remedies that hew to his America First policy platform and persistently strong trade rhetoric."
  • They estimate that the 30% tariffs could increase residential rooftop system costs by around 4% and utility-scale systems by around 10%.

Reuters reports that MJ Shiao, head of renewables research for the consultancy Wood Mackenzie, predicts the tariffs will likely cut new U.S. solar installations by 10%–15% over the next 5 years.

What they're saying: Suniva and SolarWorld Americas, the financially distressed panel makers that petitioned for the tariffs, applauded the move, even though the the penalties are less aggressive than they sought.

  • "We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States," said Juergen Stein, president of SolarWorld Americas.

Looking forward: Zindler said the market will be looking for specifics around how the penalties will be implemented. “The limited amount they have said about this has the potential to create some real confusion,” he said of the administration’s announcement.

Quick take: The relatively modest penalties are another reminder that Trump's aggressive rhetoric isn't always fully consistent with the policy decisions that emerge from the administration.

  • But that said, the Solar Energy Industries Association, the sector's main lobbying group that opposes tariffs, claimed the the decision will cause the loss of 23,000 U.S. jobs. The group has argued that import penalties will raise the costs of new power projects enough to significantly slow down new development.

Be smart: Varun Sivaram, a solar expert with the Council on Foreign Relations who opposes tariffs, sized up the decision in our Expert Voices section. Here's a snippet:

  • Expect minimal investment in U.S. solar factories (any that are built will be highly automated), net U.S. job destruction as higher solar panel prices shave the boom in solar installations by 10%, and Chinese trade retaliation.

Go deeper: Bloomberg takes stock of some of the companies that stand to gain from the decision.

This story has been updated to reflect a revision to Goldman Sachs' research note on the potential effect of import tariffs.

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Trump: "This is going to be a very painful two weeks"

President Trump said at a press briefing on Tuesday that the next two weeks in the U.S. will be "very painful" and that he wants "every American to be prepared for the days that lie ahead," before giving way to Deborah Birx to explain the models informing the White House's new guidance on the coronavirus.

Why it matters: It's a somber new tone from the president that comes after his medical advisers showed him data projecting that the virus could kill 100,000–240,000 Americans — even with strict social distancing guidelines in place.

Go deeperArrowUpdated 14 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 6 p.m. ET: 850,583 — Total deaths: 41,654 — Total recoveries: 176,714.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 6 p.m. ET: 184,183 — Total deaths: 3,721 — Total recoveries: 6,043.
  3. Business updates: Should you pay your rent or mortgage during the coronavirus pandemic? Find out if you are protected under the CARES Act.
  4. Public health updates: More than 400 long-term care facilities across the U.S. report patients with coronavirus — Older adults and people with underlying health conditions are more at risk, new data shows.
  5. Federal government latest: The White House and other institutions are observing several models to better understand and prepare cities for when the coronavirus is expected to peak in the U.S.
  6. U.S.S. Theodore Roosevelt: Captain of nuclear aircraft carrier docked in Guam pleaded with the U.S. Navy for more resources after more than 100 members of his crew tested positive.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Paying rent in a pandemic

Illustration: Aïda Amer/Axios

For many people who've lost jobs or income because of the coronavirus pandemic, tomorrow presents a stressful decision: Do you pay your rent or mortgage?

Why it matters: The new CARES Act that was signed by President Trump on Friday protects homeowners and renters who are suffering from the response to the coronavirus pandemic — but it's not “a one-size-fits-all policy rulebook,” a congressional aide tells Axios.

Go deeperArrow2 hours ago - Health