A recent ruling by the International Trade Commission claims that imported parts for solar panels have caused “serious injury” for American-based manufacturers Suniva and SolarWorld. While there is a possibility of a less stringent outcome, the ruling will likely mean the ITC proposes steep tariffs on imported goods, causing prices to go up, many installation firms to fold, and competition to go down. The proposed ruling of taxes on imports wouldn’t affect imports from Canada, Singapore and free trade South American countries.
Some manufacturers have been prepared for an eventual tightening on international goods in the solar industry. Mission Solar, for example, is a San Antonio-based manufacturer that has focused its efforts on technology innovation rather than meeting mass installation demand. With most of the job impact to be felt on installation firms with outsourced goods, smaller manufacturing companies such as Mission Solar are positioning themselves to weather the storm and gain a stronger foothold in the U.S. market and beyond. As with any industry, being local in solar has its advantages, including:
- Smaller, more controlled logistical networks
- Faster lead times for custom work
- Localized maintenance teams
- Higher quality assurance due to in-house manufacturing, testing and production
- Possible tax breaks for hiring local, building local, and selling local
In the short term, installation firms have begun stockpiling imported parts before any final verdict is rendered in order to save money. The result? More expensive solar panels for consumers looking to expand their renewable energy footprint. Whether or not demand will even itself out remains to be seen, but cost for the consumer is likely to go up if larger domestic firms have more control over cell pricing and availability. That could lead to more small American companies following Mission Solar’s lead and focusing on technology innovation, such as First Solar, which develops a thin-film style of solar panel rather than the heavier, bulkier panels known to the industry.
Whether the ITC calls for strict rules against imports or softens their stance, the solar industry is bound for some level of change. Inevitably, some companies will relocate to America and abide by new tariffs, while others will pivot and focus on technology rather than mass installation. What do you see happening with this recent ITC ruling? Share your thoughts in the comments section.