Trump deals blow to solar makers; forcing industry to look elsewhere for growth (updated)

Shunfeng International Clean Energy

23/01/2018 06:06

* U.S. introduces import tariff on solar equipment imports 
    * Decision is a "shock to Asian suppliers" - Wood Mackenzie 
    * Governments in Asia threaten reaction to U.S. 
protectionism 
    * Solar industry will look elsewhere for growth 
 
 (Adds Goldman Sachs, ReneSola comment) 
    By Henning Gloystein 
    SINGAPORE, Jan 23 (Reuters) - U.S. President Donald Trump's 
decision to slap tariffs on solar panel imports is a blow to a 
booming global industry. 
    The protectionist measures will pull investments in the 
technology out of the United States and into Asia and other 
regions, as the industry tries to make up for the lost 
opportunity in America, industry sources said on Tuesday. 
    Trump on Monday approved a 30 percent tariff on solar cell 
and module imports that will drop to 15 percent within four 
years. Up to 2.5 gigawatt (GW) of unassembled solar cell imports 
are allowed tariff-free in each year.  urn:newsml:reuters.com:*:nL2N1PH1WV 
    The decision will likely curb growth in U.S. capacity, the 
world's fourth-largest after China, Japan and Germany. Globally, 
solar capacity has soared to almost 400 GW last year from under 
10 GW in 2007, according to the International Renewable Energy 
Administration. 
    The U.S. government argued that its domestic manufacturers 
could not compete with what it said were artificially 
lower-priced Asian panels.  urn:newsml:reuters.com:*:nL4N1MV308 
    Chinese panel makers, the world's biggest builders of solar 
photo-voltaic cells, will be hit hardest by the tariffs at their 
production sites across Asia.  
    "The duty barrier will shock Asian suppliers in the 
near-term," said Frank Yu of energy consultancy Wood Mackenzie. 
    Asian panel makers said they would seek business elsewhere 
to make up for the lost U.S. opportunities 
    "The U.S. decision will certainly affect Chinese solar panel 
makers," said Jack Feng, vice president at Trina Solar, one of 
China's top panel makers alongside Jinko Solar. 
    Feng said his firm would "expand their territory to a 
broader range in the globe,", including Europe, China, Indonesia 
and India.  urn:newsml:reuters.com:*:nL3N1J424Q 
    Trump has vowed to dismantle free trade pacts he said harmed 
U.S. workers. 
    Asian governments said they would resist Trump's move. 
    China's Ministry of Commerce on Tuesday expressed strong 
dissatisfaction regarding the solar tariffs, saying the decision 
deteriorated the global trade environment.  urn:newsml:reuters.com:*:nB9N1P5029 
    South Korea said it would "actively respond to U.S. trade 
protectionism", including exercising its rights under the World 
Trade Organization.  urn:newsml:reuters.com:*:nL4N1PI1AV 
    Beyond the impact to the solar market, Morgan Stanley warned 
of wider economic damage as the protectionist stance "could 
challenge investors' perception whether the U.S. will adhere to 
current free trade policies." 
    POTENTIAL EXEMPTIONS 
    There is still uncertainty on when the tariffs will be 
implemented and how the 2.5 GW of tariff-free imports will be 
administered. 
    Shares of U.S. panel maker SunPower  SPWR.O  climbed 0.8 
percent on Monday and shares of electric car maker Tesla 
 TSLA.O , which also produces solar panels, gained 1.5 percent 
on the day. 
    Yet analysts warned that the benefits for U.S. solar firms 
were not clear-cut. 
    "The overwhelming majority of the 260,000 solar jobs in the 
U.S. depend on the cheaper imported products," Height Securities 
said. 
    Goldman Sachs estimated the 30 percent "tariffs imply a 
potential 3-7 percent cost increase for utility-scale and 
residential solar costs, respectively." 
    Wood Mackenzie estimated the tariffs would reduce U.S. solar 
installation growth by 10 to 15 percent over the next five 
years. 
    There remains the possibility of some manufacturers winning 
exclusions to the tariffs. 
    "Two key exclusions with respect to technology and certain 
countries (Canada/Singapore, among others) were included as part 
of the (initial) recommendation... The status of whether these 
exclusions... will be in focus in the coming days," Goldman 
Sachs said. 
    Canadian Solar  CSIQ.O  is one the world's biggest panel 
manufacturers. In Singapore, unlisted REC operates one of the 
city-state's biggest manufacturing sites. 
    Doran Hole, Chief Executive Officer for North America at 
U.S.-listed ReneSola  SOL.N , said there may still be ways to 
settle the trade dispute. 
    "There is quite a bit of discretion about negotiations for 
a settlement. Having a global settlement would certainly be 
useful to the industry as a whole."     
 
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GRAPHIC: Global solar power capacity by country    http://reut.rs/2E11pjw 
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 (Reporting by Henning Gloystein in SINGAPORE; Additional 
reporting by Jumin Park and Jane Chung in SEOUL, Muyu Xu in 
BEIJING, and David Stanway in SHANGHAI; Writing by Henning 
Gloystein; Editing by Christian Schmollinger) 
 ((henning.gloystein@thomsonreuters.com; +65 6870 3263; Reuters 
Messaging: Twitter: @hgloystein)) 
 
Keywords: USA TRADE/TARIFFS SOLAR