Glenn Siemens, president of the local chapter of the California Solar Energy Industries Association and CEO of Arise Solar, said it was good to see policies to protect American manufacturers. Photo by Donald A. Promnitz
Solar installers are taking a mixed view of a planned 30-percent tariff on foreign-made solar panels announced this week by President Donald Trump.
For some local installers it was an expected move from a president who warned of protectionist policies since his campaign began in 2016. In fact, it provided some much-needed certainty.
Others feel it could stunt their business, leading to higher prices and layoffs.
“So I can tell you I come at a different viewpoint than about 99 percent of my constituents,” said Glenn Siemens, president of the local chapter of the California Solar Energy Industries Association. “So I don’t necessarily follow the belief that this is a bad thing.”
Siemens, who is also the CEO of Arise Solar, hosted a press conference Wednesday at his Fresno headquarters to point out that while prices in solar will go up, the industry is prepared. This is largely because the solar industry, as he put it, is highly regulated.
“I don’t really see a real issue with the tariff. I am glad to see that American businesses are actually — finally — starting to be brought to the forefront and not put on the back burner,” Siemens said.
Talk of a tariff started stirring in 2005, when China began to move into the renewable energy market. The financial backing of the Chinese government allowed manufacturers to drop prices and take over a large portion (about 60 percent, according to Siemens) of the market for supplied panels. Because of this, many American manufacturers were unable to compete and were driven out of business.
“So, really for me, Trump has finally come and put us back on the level playing field,” Siemens said. “The solar panels I have on my home — which are now 11 years old — that manufacturer is bankrupt and gone because of the same reason why Trump put the tariff on.”
The 30-percent tariff will probably not be enough to affect solar prices on a large scale, especially considering how much the cost of solar has dropped over the past ten years. In 2012, solar panels were going for $1.15 per watt of energy generated at peak hours, according to the Energy Information Administration.
In 2016, Mike Pickett of Pickett Solar in Fresno, was seeing panels installed for around 40 cents a watt. In July of last year, Pickett began to see the price increase to 50 cents.
“If you look at the historical cost of the system, it’s still cheaper than it was,” Pickett said.
When it comes to the consumer, the consensus is that the increase would not be significant.
“It doesn’t help, but it’s not going to hurt,” said Ty Simpson at Bakersfield-based Bland Solar, which has a showroom in Clovis.
On a $25,000 job, there might be a $2,000 increase, which, on a 15-year loan, would translate to a $17 increase to payments of $235 a month from $218, depending on the loan, according to Simpson.
Perhaps more important for installers is that they now know how much they can charge. The industry anticipated these tariffs, but didn’t know how high they would be, causing a lot of uncertainty.
“People don’t want to make decisions without knowing,” Pickett said. “I can’t convince a business owner to make a purchase without being able to tell him the price.”
This uncertainty put a lot of distributors and installers on edge and companies began buying up solar panels while they were still cheap.
Pickett, who also rents out pre-fabricated buildings, rented out 13,000 square feet to one customer to store panels.
Simpson is happy because he recently got a shipment of panels that landed before the tariff kicked in, making those panels especially valuable.
The solar industry’s reception hasn’t been universally positive. Jim Petersen, CEO of Fremont-based PetersenDean, a California company that installs solar rooftop panels mostly for residential customers, once favored tariffs on imported panels, which he found to be of inferior quality. He has changed his mind, he said in an interview this week with the Associated Press.
Petersen said tariffs could stunt his business by raising the cost of a job, which ranges from $6,000 to $60,000 or more. He said he might be forced to lay off up to 25 percent of his 3,200 installers.
“This is bad for American jobs, bad for the consumer,” he said.
The overall intent of the tariff, however, was not to affect consumption, but rather to encourage domestic buying and increase manufacturing jobs.
“No doubt there has been a big loss in manufacturing in the U.S. and that’s probably directly related to imports being cheap,” Pickett said.
The 30-percent tariff is only slated to last for four years, and it will decrease every year on top of that.
But some installers don’t see that as being enough to give domestic manufacturers enough.
“I still don’t think they can compete,” Simpson said. “Even with a small tariff on overseas panels, it’s still cost effective to buy overseas.”