The Trump administration’s decision to impose a tariff on imported solar cells is likely to drive up prices for solar systems in Hawaii, but the effect may be more muted than in other locales, energy executives say.
One reason is that several big solar farms planned for the islands are already so far along that solar panels have been bought or ordered and the tariff won’t affect costs.
For consumers, there’s another reason, says Colin Yost, chief operating officer of RevoluSun LLC, a Honolulu solar company. Hawaii residents pay the highest rates in the nation for electricity, Yost said. And that means solar systems will still be a good deal.
“Even if costs of panels go up, consumers will still save substantially” by installing a rooftop solar system, Yost said. “It will still be a lot cheaper than the utility.”
Several large solar farms in the works will not be affected by a tariff on imported solar panels approved by the Trump administration.
Cory Lum/Civil Beat
The four-year tariff approved by President Donald Trump last month tacks on 30 percent of the manufacturer’s cost in the first year and declines by 5 percent annually until it reaches a floor of 15 percent in its fourth year. The tariff covers photovoltaic cells imported from all countries, although the measure is aimed primarily at China, which the U.S. has accused of dumping below-cost solar cells onto the global market to prevent would-be competitors from making solar cells.
For consumers thinking about installing a solar system, solar executives estimate, the tariff is expected to initially add about 3 percent to the cost of a system. For example, the website EnergySage, which lets consumers compare prices for solar systems, estimates the first-year tariff will amount to 3 percent to 4 percent of a system’s cost but decline to less than 2 percent by the fourth year. For a six-kilowatt home system, the site says, that amounts to an extra $600 to $720 the first year and $240 to $300 the fourth year.
Robert Harris, director of public policy for the solar company Sunrun, agreed the price increases for residential customers will be nominal, but hardly a positive development for a state with a mandate that 100 percent of its electricity must be produced from renewable sources by 2045.
“Is it going to kill the industry? Certainly not,” he said. “But it’s another roadblock.”
Utility-scale solar producers were less concerned.
“There really is no impact on us negatively,” said Beth Tokioka, a spokeswoman for the Kauai Island Utility Cooperative, a nonprofit customer-owned electric provider. The company has announced a project with the Navy to develop a 19.3-megawatt solar facility and massive battery energy storage system at the island’s Pacific Missile Range Facility – Barking Sands.
The price of rooftop solar systems is expected to increase 3 percent to 4 percent during the tariff’s first year but decline as the amount of the tariff decreases.
And, in what the co-op is billing as Hawaii’s largest solar-plus-battery system, KIUC is working with AES Corp. to build a 28-megawatt photovoltaic and energy storage system on former sugar land between Lawai and Koloa on Kauai’s south shore.
The systems are already in the works and the cost of the panels is already in the books, Tokioka said.
The same goes for three projects Hawaiian Electric Co. is developing with NRG Inc.: a 14.7-megawatt Lanikuhana plant, a 45.9-megawatt Waipio solar plant and a 49-megawatt Kawailoa solar facility. The three projects were originally proposed by SunEdison but were acquired by NRG in 2016 after SunEdison went bankrupt.
Those projects shouldn’t be affected, said Peter Rosegg, a HECO spokesman. As for future projects, he said, “We don’t see it having a huge impact.”
Will Giese, executive director of the Hawaii Solar Energy Industries Association, agreed the tariff will likely have little impact on residential systems. Still, he said, the tariff sent jitters across the supply chain late last year, as distributors bought and stockpiled panels before the tariff went into effect. And that could cause problems down the road as the market rights itself, he said.
“It was crazy in the second half of last year,” he said.
The companies petitioned a bipartisan panel called the U.S. International Trade Commission, which in September unanimously determined that imports of crystalline silicon photovoltaic cells were hurting the U.S.-based manufacturers. The four-person commission consists of two Democrats and two Republicans; three members were nominated by President Barack Obama and one by President George W. Bush.
The panel sent its recommendation to Trump’s trade representative, who proposed the tariff that Trump approved. The tariff approved by Trump is smaller than the remedy proposed by the bipartisan panel, which called for a 35 percent tariff that would decrease to 32 percent by the fourth year.
Sign up for our FREE morning newsletter and face each day more informed.