The federal administration’s new tariff on imported solar panels has some Delaware installation companies worried that increased prices could hurt their business.
Federal officials imposed a 30 percent tariff on solar equipment made overseas. With increased costs expected to trigger industry job cuts, Dale Davis, the president of CMI Solar Electric in Newark, says his business could decline a little.
“Because we have to pay an additional 30 percent for our solar panels, we’re going to collect that from our customers, pass it to our suppliers or we’re going to pass it to our manufacturers who are going to pay a tariff with it,” Davis said. “So unless those tariff fees somehow come back to the industry as a benefit, everybody loses essentially.”
Since the tariff was announced last week, CMI has been scrambling to fill six orders at pre-tariff prices, Davis said.
Davis said his business has used American-made solar panels before and could possibly lean on them more to avoid the tariff’s impact, but their quality is often not as high as panels made overseas.
In Delaware, interest in residential solar installations has increased with the help of the state’s Green Energy Program. According to Delaware’s Division of Energy and Climate, since the program’s inception in 2002, the state has awarded more than 3,700 solar projects about $51 million for 33.5 MegaWatts of added capacity.
The program has helped finance 89 percent of all installations and 35 percent of solar capacity in the state. According to the United States Trade Representative and findings from the International Trade Commission, imports grew by 500 percent from 2012 to 2016. Simultaneously, prices for solar panels dropped by about 60 percent, causing many U.S. producers to go bankrupt.
Even if they'll take a hit from the 30 percent solar tax, some local installation companies like Rehoboth Beach-based Clean Energy USA say solar still has room to grow in Delaware. Clean Energy USA’s president John Sertich said he was nervous the tariff was going to be higher.
Sertich said his business is focused on staying competitive with these new tariffs, and while the tariff may slow his company’s growth, he believes solar has a good future ahead in Delaware.
“We want to keep on the right path and it’s really a good future both for jobs which creates revenue for the state and also for the environment, “ Sertich said. “So I think we’re just on a great path right now.”
The tariff on imported solar equipment is expected to decrease to 25 percent in its second year, 20 percent in its third year, and 15 percent in year four.
