Trump deals blow to solar makers, industry to focus on growth away from U.S.

Shunfeng International Clean Energy

23/01/2018 05:02

* 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 
 
    By Henning Gloystein 
    SINGAPORE, Jan 23 (Reuters) - U.S. President Donald Trump's 
decision on Monday to slap tariffs on solar power equipment 
imports 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 approved a 30 percent tariff on solar cell and module 
imports that will drop to 15 percent in 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 surging growth in U.S. solar 
power 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.  
    China is the world's biggest builder of solar photo-voltaic 
cells and the tariffs will damage Asian companies the most. 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 
    "The duty barrier will shock Asian suppliers in the 
near-term," said Frank Yu, Asia-Pacific power and renewables 
principal at energy consultancy Wood Mackenzie. 
    Wood Mackenzie said the tariffs are projected to reduce U.S. 
solar installation growth by 10 to 15 percent over the next five 
years. 
    Chinese solar manufacturers including unlisted Jinko Solar 
and Trina Solar, the country's two biggest solar builders, could 
bear the brunt of the tariff. U.S.-listed shares of Yingli Green 
Energy Holding Co  YGE.N , one of China's top 10 solar builders, 
slipped 0.5 percent on Monday.  
    Jack Feng, a vice president at Trina Solar, said panel 
makers would "expand their territory to a broader range in the 
globe,", including Europe, China, Indonesia and India, to make 
up for the lack of U.S. access.  urn:newsml:reuters.com:*:nL3N1J424Q 
    "The U.S. decision will certainly affect Chinese solar panel 
makers," he said, although it was no surprise given Trump's 
previous statements.  
    Trump vowed as president to dismantle free trade pacts that 
he said harmed U.S. workers, with a particular emphasis on what 
he called bad trade deals with countries including China. 
    China's Ministry of Commerce on Tuesday expressed strong 
dissatisfaction regarding the solar tariffs, adding the decision 
further deteriorates the global trade environment.  urn:newsml:reuters.com:*:nB9N1P5029 
    The South Korean government said it would "actively respond 
to U.S. trade protectionism" to protect its own national 
interests, including exercising its rights under the World Trade 
Organization.  urn:newsml:reuters.com:*:nL4N1PI1AV 
    "It is true that U.S. solar imports have increased, but the 
main reason of the increase is due to growing U.S. domestic 
demand for solar products," South Korea's Trade Minister Kim 
Hyun-chong said on Tuesday. 
    LOOKING ELSEWHERE 
    There is still uncertainty on when the tariffs will be 
implemented and how the 2.5 GW of tariff-free imports will be 
administered or whether there will be exemptions for some 
countries. 
    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. But, analysts warned, the benefit is 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 in a note. 
    Morgan Stanley warned of supply chain disruptions in the 
solar sector because of the tariffs and the risk the 
protectionist stance "could challenge investors' perception 
whether the U.S. will adhere to current free trade policies." 
    Underscoring the interconnected nature of the global solar 
panel industry, one of the lead complainants in the tariff 
decision, Suniva Inc, is majority-owned by Hong Kong-listed 
Shunfeng International Clean Energy Ltd  1165.HK . 
     
 
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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 and Muyu Xu in 
BEIJING; Writing by Henning Gloystein; Editing by Christian 
Schmollinger) 
 ((henning.gloystein@thomsonreuters.com; +65 6870 3263; Reuters 
Messaging: Twitter: @hgloystein)) 
 
Keywords: USA TRADE/TARIFFS SOLAR