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Will Solar Module Tariffs Lead to Design Change? What Are the Risks?

Jan 25, 2018 5 MIN. READ

The new measure may increase the all-in costs of large utility solar potentially resulting in system design changes.

New solar import tariffs announced by the Trump administration this week may force developers and builders to scramble to keep existing projects alive as they face increased module costs. This could, in turn, result in changes to system design, technology selection, construction and operation.

Though the general industry consensus among industry leaders is that these tariffs will have negative effects in the short-term, increased cost pressure for future projects may lead to increased innovation — adoption of newer technologies, techniques and practices, and changes to system optimization — as the industry adapts to the cost impact of the module tariffs. As such innovations are introduced, though, it becomes increasingly critical that project stakeholders can accurately assess various risks to the project.

A Closer Look at the Tariffs

But let’s take a step back and look at the facts — why were these tariffs created in the first place? The administration announced import tariffs of 30% on crystalline silicon solar modules and solar cells (the first 2.5 GW of imported cells are to be excluded from the additional tariff) decreasing by 5 percent annually per year for a total of four years. The tariffs, issued under Section 201 of the Trade Act of 1974, are intended to help shield U.S. manufacturers of crystalline solar cells and solar modules from trade practices deemed unfair by the U.S. International Trade Commission.

While details remain sparse, many industry experts are expecting near-term price increases in excess of $0.10/W-DC for the installed cost of utility solar installations. The overall impact may be in excess of an 8 percent increase in the all-in cost of utility scale facilities (relative to mid-2017 pricing).