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Chart: US solar installations could fall 50% or more under new tariffs

If the Commerce Department imposes trade sanctions sought by Auxin, the solar industry could be set back years and lose tens of thousands of jobs.

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Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format. Canary thanks Natural Power for its support of this feature.

The actions of a tiny equipment supplier are leading to tens of gigawatts of solar power not being deployed in the U.S. The solar-panel manufacturer Auxin Solar filed a trade complaint earlier this year that triggered an investigation by the U.S. Commerce Department into whether tariffs should be imposed on solar modules imported from Cambodia, Malaysia, Thailand and Vietnam, which have been supplying about 80 percent of the solar panels installed in the U.S.

If such tariffs are levied, the amount of solar power capacity deployed in the U.S. this year and next could be slashed almost in half, the Solar Energy Industries Association estimates, based on a survey of solar and storage companies.

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Research company Rystad Energy projects an even more dire impact. It warns that nearly two-thirds of planned U.S. solar capacity installations in 2022 are at risk because of the Auxin tariff case. Rystad had expected 27 gigawatts of solar capacity to be added in the U.S. this year, but now it’s projecting that could fall to 10 GW — which would be the smallest yearly total since 2019

Here’s the stark math of the trade case: The cost of solar modules, the primary component in utility-scale solar projects, could increase by about 43 percent if tariffs are imposed, according to calculations by David Riester of Segue Sustainable Infrastructure. He estimates that about 70 GW of solar projects in the U.S. could be killed by the Auxin tariffs over about the next three years — a horrifying prospect,” according to Riester. 

Indeed, it’s a calamity for the solar sector, one of the bright spots in U.S. renewables — until now. The Solar Energy Industries Association estimates that more than 100,000 jobs could be lost if Auxin’s requested tariffs are imposed. 

The U.S. is absolutely dependent on cheap, imported solar panels to reach its decarbonization and electrification goals and does not have enough production capacity to come anywhere close to meeting domestic demand. What little silicon solar panel manufacturing does exist in the U.S. is also under threat from the tariff case because it depends almost entirely on photovoltaic cell imports from overseas.

The Commerce Department is expected to issue a preliminary judgment on the case in August and a final decision by January of next year. A number of U.S. senators, among others, are calling for it to move more quickly. 

This could be the most disruptive event ever to face the U.S. solar industry,” said Marcelo Ortega, renewables analyst with Rystad Energy.

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Natural Power is a global consultancy that supports its clients to deliver a wide range of renewable energy projects. Its independent engineering experience covers all phases of the project lifecycle, from feasibility through construction to operations, and all stages of the transaction. Learn more.

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Eric Wesoff is the editorial director at Canary Media.

Maria Virginia Olano is editorial and research associate at Canary Media.