Quick Take: It seems that we may have two trends working together to make it harder for renewables to reach grid parity. First, renewables are getting more expensive (or, at best, hitting a plateau). This is because tax incentives are lapsing for both wind and solar. And because threatened tariffs will make Chinese solar panels and Chinese wind components more expensive.
Second, natural gas is getting cheaper thanks to the fracking technology that has unleashed immense new supplies. We’ve always believed that smart grid would grow in part because of the need to integrate renewables. Now it appears renewables may grow more slowly than originally expected, which begs the question: Are we shooting ourselves in the foot as far as our renewables efforts are concerned or will tariffs do more good than harm? Use the Talk Back form HERE to let us know how you see it. - - Jesse Berst
The U.S. Commerce Department announced in mid-May that new tariffs on Chinese solar cells and modules will be a lot higher than originally expected – with a rate of about 30% or more – to protect U.S. industry from “allegedly subsidized” components being sold in the country at lower than fair market value.
While it’s a preliminary ruling based on earlier findings from the U.S. Trade Commission (a final ruling is expected later this year), China has threatened to respond with counter-tariffs on American makers of related products, according to Scientific American.
Market intelligence company IHS said in a press release this week that Chinese solar exports to the U.S. could drop by about 50% this year as a result of the tariffs.
The Commerce announcement immediately split the U.S. solar industry into two very different camps: those that think tariffs are a great idea and those that don’t. Tariff proponents said China is artificially driving prices down and choking production, while opponents said most solar jobs in the U.S. are in areas like sales and installation and that the industry benefits from the bargain-priced Chinese panels, said a CNN Money news story. The story also said opponents are afraid the tariffs will hamper solar’s ability to compete with fossil fuel power generation.