Executives at solar energy companies in New Mexico say this week’s decision by President Donald Trump to impose a tariff on imported solar cells will slow the installation of new systems and kill jobs in the state.
“It’s really going to impact the solar industry for a while. It’s going to slow down installations,” said Rachel Hillier, executive director of the Renewable Energy Industry Association of New Mexico.
“When you look at the kind of growth numbers in the industry,” she said, “this kind of kicks us in the teeth.”
Mark Johnson, founder and chief executive of Sol Luna Solar, a company based in Dixon that installs systems throughout Northern New Mexico, agreed that the tariff will have an effect. “Hell, yeah, it’s going to hurt New Mexico businesses,” he said.
The White House announced the new 30 percent tariff, less than the 50 percent originally proposed, on imported solar panels as a way to even the playing field and support American-made products.
“My administration is committed to defending American companies, and they’ve been very badly hurt from harmful import surges that threaten the livelihood of their workers,” Trump said as he signed the tariff. “The United States will not be taken advantage of anymore.”
But industry advocates say most solar companies in the United States are focused on installations or manufacturing parts for solar systems — and those firms will take a hit from higher costs. Abigail Ross Hopper, president of the Solar Energy Industries Association, predicts the tariff will wipe out 23,000 jobs nationwide and lead to 1.2 million fewer homes outfitted with solar power.
Nationwide, solar installations have jumped tenfold since 2010, according to the association.
The tariff has the potential to wipe out all those gains without producing any more manufacturing jobs, Hillier said.
The case for a tariff emerged from a complaint by two U.S.-based companies that manufactured solar cells, the building blocks of solar panels: Suniva Inc., the Georgia-based subsidiary of a Chinese firm, which declared bankruptcy in April, and SolarWorld Americas, the U.S. subsidiary of a German company.
The two companies argued that they had been crushed by an influx of cheap imported solar cells and modules, mostly produced by Chinese companies. China’s share of global solar-cell production shot up from 7 percent in 2005 to nearly 70 percent last year. As prices plunged, nearly 30 U.S. plants closed over the past five years, according to The Associated Press.
Solar installers in New Mexico say there are a variety of reasons production has moved to China, including proximity to raw materials. That migration has resulted in lower-priced solar projects, which is helping to drive consumer demand because the time to recoup upfront installation costs is shorter than ever.
“This whole deal is a phony fix to a problem that doesn’t exist,” Johnson said. “There are no factories in the U.S. that make solar panels. We don’t have the infrastructure to make solar panels – that’s why they are made overseas.”
His company purchased 12,000 panels in the most recent year, he said, and his costs for those would now be increasing from $1.2 million to $1.7 million with the tariff. He expects the increase to push some people out of the market. “Going solar will be more expensive for people with little means.”
Christopher Fortson, a marketing manager at Santa Fe-based Positive Energy Solar, said panels are only a portion of the cost for a project, but a significant one. Overall, he expects the tariff ruling to increase the typical residential installation about 10 percent. So, if an average home project cost $20,000, it would be $2,000 more with the tariff.
U.S. Sen. Martin Heinrich, D-N.M., has been one of the most vocal opponents of the tariff.
As a member of the Senate Committee on Energy and Natural Resources, Heinrich testified before the U.S. International Trade Commission in opposition and sent a letter to the Trump administration about potential negative effects on American jobs.
“New Mexico has seen major job growth in the solar industry, thanks to the rapidly declining cost of solar power,” he said in his testimony in October. “New Mexico workers are employed in local companies that manufacture equipment, install residential rooftop solar and build utility-scale solar installations. We have seen 54 percent growth in solar industry jobs in New Mexico in the last year alone.”
U.S. Rep. Steve Pearce, R-N.M., and a candidate for governor, supports the tariff, saying it will give American companies who want to manufacture solar panels a chance to do so.
The federal government still offers a tax credit for solar installations until 2022.
The state of New Mexico’s credit for residential solar installations expired in 2016. Sen. Mimi Stewart, D-Albuquerque, has filed legislation this session, Senate Bill 79, to restore the credit for 10 percent of the total cost of materials and installation with a $9,000 cap.
The Associated Press contributed to this report.
This story originally appeared in The New Mexican, a sibling publication of The Taos News. Contact Bruce Krasnow at firstname.lastname@example.org.