Solar installation five-year forecast reduced 11 percent due to Trump tariff decision
According to new analysis by GTM Research, the tariffs on imported solar cells and modules set forth by the Trump administration will result in an 11 percent decrease in U.S. solar PV installations over the next five years. This represents a reduction of 7.6 GW of installed solar PV capacity between 2018 and 2022.
FIGURE: Annual U.S. PV Installations with and without Tariffs, 2017E-2022E
GTM Research notes that the tariffs result in an average $0.10/W increase in year 1 prices to modules, stepping down to a $0.04/W premium by year 4.
According to the analysis, the utility-scale solar segment will be more heavily affected than the residential and commercial solar segments, taking 65 percent of the expected 7.6 GW of reductions over the next five years.
FIGURE: Annual U.S. PV Installation Reductions Due to Tariffs by Segment
Projects under construction or with modules already in inventory will damper the effect on 2018 installations, with the effect of tariffs hitting the downstream market more heavily in 2019.
The analysis also shows that new and emerging state markets are disproportionately affected, with southern states like Texas, Florida, Georgia and South Carolina amongst the most impacted by the tariffs.
“Trump’s decision on solar tariffs matches closely to recommendations from the US International Trade Commission,” said MJ Shiao, Head of Americas at GTM Research. “The overall effect is a meaningful but not destructive reduction to expected solar installations in concert with modest improvements to a still challenging environment for domestic solar cell and module manufacturing.”
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